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IN A SIGNIFICANT but measured change to its operations, Betfair has abolished its controversial Premium Charge, replacing it with a new system dubbed the Expert Fee. Launched on January 6, 2025, the change has sparked discussion among bettors and industry observers, with the company framing it as a fairer and more transparent approach. However, questions linger about whether this shift can address the broader challenges facing exchange betting.
A Tiered Approach to Commission
Under the new structure, Betfair levies fees based on users' profitability over the past 52 weeks, introducing a tiered system aimed at easing the burden on smaller players while still targeting the most profitable users. The details are as follows:
- No Fee: Users with gross profits below £25,000 over 52 weeks pay no additional charges beyond standard commissions.
- 20% Fee: Those earning between £25,000 and £100,000 in gross profits incur a 20% fee on their earnings.
- 40% Fee: For the most profitable players—those with gross profits exceeding £100,000—a 40% fee applies.
This structure marks a departure from the Premium Charge, which could see bettors paying up to 60% of their earnings, often calculated on a lifetime basis.
Flexibility and Fairness
The Expert Fee incorporates several mechanisms aimed at improving fairness. Notably, it considers a rolling 52-week period rather than lifetime profits, aligning fees with recent performance rather than historical success. Additionally, a "buffer" system allows for the deduction of losses and the consideration of commissions generated since the last fee payment, potentially reducing the overall fee burden.
The fee is assessed and deducted weekly, offering a real-time reflection of users' betting activity.
Exchange Betting’s Wider Challenges
While the Expert Fee represents a refinement of Betfair’s fee structure, it is unlikely to reshape the broader landscape of exchange betting. The sector faces significant headwinds, including stiff competition from fixed-odds betting operators like Bet365, whose streamlined offerings and promotional strategies have captured a substantial share of the market.
Moreover, regulatory pressures, including harsh tax regimes in certain jurisdictions, have forced Betfair to withdraw from some countries, further straining liquidity. This reduction in available markets has compounded the challenges for exchange betting, limiting opportunities for both recreational and professional players.
These trends are starkly illustrated by a consistent decline in traded volumes on Betfair’s UK and Irish win markets during the January to March period. Inflation-adjusted figures show a drop from over £1.5 billion in 2020 to below £1 billion in 2024. (See Figure 1 below.)
Additionally, interest in "Betfair trading" as a search term has steadily declined over the years, as indicated by Google Trends data. While exchange betting stagnates, Betfair's sportsbook and casino arms have seen comparatively greater interest, suggesting a shift in user behavior. (See Figure 2 below.)
Winners and Losers
Betfair estimates that the new structure benefits the majority of users: approximately 80% of players pay less than they would under the Premium Charge, and half of all users pay no additional fees at all. However, the 40% fee tier has raised eyebrows among high-stakes bettors who consistently generate substantial profits. For these players, the new system represents a significant cost that could impact their participation in the exchange.
Broader Industry Implications
Betfair’s move to the Expert Fee can be seen as a response to mounting pressure to make the exchange more attractive to bettors across the spectrum. By lowering the top-end fee from 60% to 40% and eliminating charges for less profitable players, Betfair appears to be seeking a balance between inclusivity and profitability.
Nevertheless, fixed-odds betting remains a formidable competitor, and questions persist about whether this fee adjustment can meaningfully address the liquidity challenges plaguing the exchange. With competitors like Smarkets and Matchbook vying for market share, Betfair’s long-term dominance in the sector is far from guaranteed.
A Balancing Act
The introduction of the Expert Fee underscores the delicate balancing act facing Betfair and other exchanges: encouraging liquidity from professional bettors while maintaining accessibility for the wider betting public. However, with fixed-odds operators thriving and regulatory challenges mounting, the success of this initiative will likely depend on broader strategic adjustments beyond fee structures.
As the new system takes effect, the betting community remains cautious. Whether the Expert Fee can address the complex challenges of exchange betting or merely serve as a short-term adjustment remains to be seen.
Written by
Co-founder of Pinnacle Odds Dropper and creator of The Steam Report which is a weekly advantage betting newsletter
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