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Betfair's premium charge increase welcomes winners with open palms 04/08/2011
Will Hayler
The betting exchange claims only 500 customers will pay the new rate, but it could have an adverse affect on average punters

Nothing is guaranteed to stir up punters as much as threatening to take their winnings away, and it's no surprise that changes announced this week to Betfair's premium charge structure have been met with a mixture of outrage and transparent threats to take business elsewhere.

It's worth emphasising that only a tiny minority of Betfair's customers will be affected by the creation of a new top tier of premium charge payers – only punters who are more than £250,000 in profit on the exchange will have to pay at the new rate. Betfair estimates around 500 of their 3.8 million users will be hit.

However, everyday users of Betfaircould be indirectly affected if the increased charges mean that traders who dip in and out of many markets for small but steady profits, decide it is no longer viable to continue to use the website when faced with a tax of up to 60% on their profits.

These kind of traders play a significant role in the liquidity of many racing markets, although a statement from Betfair issued to the City, along with their latest results, suggested that any holes could in the future be plugged by the development of "an integrated exchange and sportsbook combination" – effectively an acknowledgement that Betfair believes it can operate simultaneously as bookmaker and betting exchange.

Sympathy should perhaps be limited towards premium charge-paying punters using faster picture feeds or work from the racecourse to hoover up money on in-running racing markets. Along with those colloquially described as "courtsiders" – exchange punters who have made money from trading in-running on tennis matches by heading to the tournaments and being first to the back or lay button every time – in-running racing punters who lay bets placed on fallers are often seen, even among their own, as parasites. Furthermore, those utilising computer programmes and algorithms to produce returns with minimal overheads will probably continue to operate on the same basis.

Traders who use dedicated applications, that utilise huge volumes of data to build up statistical models are presumably the customers Betfair refers to as being those "who currently pay a rate of commissions and charges that does not reflect the benefit they gain from the Betfair ecosystem".

But there are also a number of other racing punters, those who rely more heavily on their knowledge of the formbook, who will be affected by changes to the premium charge.

A Betfair punter, for example, who has made £25,000 a year over the last 10 years on racing will now have to hand over between 40 and 60% of any future profits – if he doesn't do this naturally through commission generated, then Betfair will simply debit the difference.

That seems an altogether less satisfactory conclusion, particularly as several well-known Betfair punters who have made money out of racing have reinvested in the sport through ownership.

Betfair's former promise that "winners are always welcome", quietly withdrawn when the first 20% premium charge was introduced in 2008, clearly no longer seems to apply to this group and that's a shame (although Betfair would no doubt argue that winners remain more welcome with them than with fixed-odds rivals – they just have to pay more than they did before).

"Since inception, we have provided customers with a unique and innovative product that has consistently offered them, on average, the best value on the market," read a statement from Betfair.

No arguments with those comments here. In common with many British racing punters, Betfair has transformed a large chunk of my betting activity. No restrictions; better prices; an ability to trade out and take profits before and during races. But, then, I'm not one of the "Betfair 500". A Facebook group formed to discuss the "premium charge fiasco" was alive with activity on Wednesday, with contributors calling for strikes and/or the relocation of business to Betdaq, Betfair's biggest rival.

However, similar rallying calls have fallen on deaf ears before. The prospect of a battle between Betfair and its most successful punters may have repercussions elsewhere, not least for fixed-odds bookmakers, who could potentially expect to see some old foes attempting to return.

Proven winners are unlikely to find much in the way of a warm welcome at their door either.