Someone at work asked me why I'd bet on the exchange when it takes a cut of my winnings and the bookie doesn't. It's a fair question and the answer is a bit of arithmetic. It's the arithmetic behind every figure members see, so it's worth setting out once.
Betfair charges commission on your net winnings in each market. On my account that's 2%, and that's the figure every result I publish is worked out at. Win £100 on a race and £2 goes to Betfair. Lose and you pay nothing.
Now the bookie. He doesn't charge commission because he's already taken his cut in the price. A horse that's 2.0 on the exchange is typically 7/4 in the shop, sometimes 6/4. On a £10 bet that's £10 back against £7.50 or £6. The difference on that one bet is far more than 2% of anything. Across a year of backing short horses, the bookie's margin is the single biggest cost in your betting, and it's invisible because it's built into every price.
There's a second cost at the bookie that's bigger still, which is that he stops taking your bets. A winning account gets restricted. I've had three closed. The exchange doesn't care who wins, because it's matching you with other punters and taking its 2% either way. You can win every week for ten years and your stakes will never be cut.
The one catch is the Premium Charge. If you win a lot, consistently, over a long time, with a low commission rate, Betfair can charge extra, and it can be a lot. It kicks in for a tiny number of accounts, the serious professional ones. At the stakes most people bet, including mine, it's never been near. If you ever get the letter, you've done very well, and we should talk.
So the 2% is real and it's in every figure I show. It's also the cheapest racing bet in Britain once you count what the shop takes in the price, and it comes with the one thing the bookie will never give you. They let you keep winning. Two weeks on the list is £5, and the commission is already taken off everything you'll see.
Lee
See exactly what I do for two weeks.
For only £5.
Every bet I make, by email each racing morning, with the stake and my line on why. Pay £5 today, then £49 on day 15 for the winter pass to 31 March.
If your first month on the £49 loses, I refund it. Nothing renews after 31 March. Full details.
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