My Betfair Rewards – a new commission structure for exchange customers
Betfair has introduced a new commission structure in the form of a scheme entitled ‘My Betfair Rewards’.
In recent years, new entrants into the exchange market have undercut Betfair’s commission rate in an attempt to wrestle business away from Betfair. Until now Betfair has held their position on commission charges, a standard 5% with reductions down to a minimum of 2% for loyal customers based on their turnover.
In reality, very few bar the highest of rollers or the biggest of volume traders would ever get near to the minimum 2% Betfair commission rate. The volumes of turnover required and the relentless need to turnover such amounts meant that the lower end commission rate was for most, like chasing rainbows.
All that has changed with the introduction of Betfair Rewards, but rather than switch to a competing flat rate commission rate, Betfair have dressed it up in a 3 tier reward scheme.
For some, I think it’s fair to say that the Betfair Rewards is mildly confusing. It’s been communicated by Betfair, but it appears to have been drip feed to some accounts on a trial basis before a soft launch to the masses. Once you understand the scheme and the actions you need to take its all fairly straightforward. It’s also easy if you’re encountering your options for the first time to opt into a plan that doesn’t suit you best.
Let’s take a look at the 3 options.
Choose your My Betfair Rewards plan
There are 3 Betfair Reward plans for you to chose from.
If you don’t opt into one of the plans then you are assigned to the ‘Rewards’ plan for the coming month.
What is offered in each Betfair Rewards Plan?
The key benefit of each of the Betfair Rewards plans is the amount of commission you pay. It will be dependant on the type of bettor you are and your betting activity, but I feel that some of the other benefits you gain are rather gimmicky.
With ‘REWARDS+’ you are signing up to pay 8% commission. That is you will pay Betfair 8% of your net winnings on any exchange market. In today’s betting exchange world that is a hefty chunk of your winnings. Remember, this is your net winnings on any market. Overall if you are a losing customer, you still pay 8% on any winning bets you have.
Bear in mind that the standard commission rate on Betfair’s competitors is just 2% of net winnings, there needs to be some pretty weighty benefits to compensate for opting into this rewards plan.
So what’s on offer….
- 10% refund on losses
- £5 free acca every month
- Cash Race
- 2 free plays on Beat The Drop
With the ‘REWARDS’ plan you pay 5% of your net winnings on any exchange market in commission to Betfair.
The percentage commission is lower than the 8% in the ‘REWARDS+’ plan, but you lose some of the other benefits.
With the ‘REWARDS’ plan you get….
- £2 free acca every month
- Cash Race access
- 1 free play on Beat The Drop
The ‘BASIC’ rewards plan has the lowest commission rate. Set at 2% of net winnings on any exchange market payable to Betfair.
There are none of the benefits associated with the ‘REWARD+’ and ‘REWARD’ plan and you also forfeit some additional benefits. These are….
- No Best Odds Guaranteed on the Betfair Sportsbook
- No access to promos
What is the Betfair Cash race?
Betfair Cash Race is a promotion where you are awarded points for the commission and ‘implied commission’ that you generate through your betting activity.
There are 3 levels of cash prizes you can earn, the more commission and implied commission the greater the cash prize you earn.
- Hit target 1 and you’ll get a cash prize
- Hit target 2, you’ll receive a bigger cash prize
- Hit target 3 and you’ll earn an even bigger cash prize
How are the Betfair points calculated?
Only bets placed on either the Exchange or Tote qualify for points. Sportsbook bets do not count.
Betfair points are calculated on your commission, or your implied commission and converted into points. Every 10 pence in commission and implied commission is worth 1 Betfair point.
Place a £10 bet on a selection at 2/1 (3.0 decimal odds). If it wins you win £20. Your commission is £1.00: £20 x 5% (commission rate). Each 10 pence is worth 1 Betfair point, so in this example you earn 10 points.
For the same bet, should it lose, your implied commission is 5% of your initial stake. £10 x 5% = 50 pence. This earns you 5 Betfair points.
Your Betfair points accumulate throughout the promotion period and at the close you are awarded with the cash prize for the level you reach.
What is Betfairs ‘Beat The Drop’?
If you have ever seen ‘The £100k drop’ a UK game show hosted by Davina McCall then it will straight away give you an insight into the format of Betfair’s ‘Beat The Drop’.
Betfair REWARDS+ and REWARDS plans give you 2 and 1 free entry into their ‘Beat The Drop’.
With your free ticket, you are assigned a starting cash amount of £32k. You then required to answer 15 questions and the money left in the pot after answering all the questions is yours.
What type of questions do you have to answer
All the questions are sports-related and you are offered a range of questions to chose to answer in each of the rounds. When I say questions, you are asked to predict an outcome in an upcoming sporting event.
For example, will there be under or over 2.5 goals in a certain match? Or, will horse ‘X’ win an upcoming race, ‘yes’ or ‘no’.
Once you have decided on your answer/prediction you chose how much of your £32k starting pot to place on that outcome.
You can place all of the pot on an outcome, or divide your money between the possible outcomes. As an example, £16k on each ‘yes’ and ‘no’, will horse X win the race.
Whatever money from the pot you have wagered on the correct outcome you take through to the next round and the next question. Money from the pot, if any, that remains once you have completed all 15 questions is yours to keep.
Which Betfair Rewards plan should you opt in to?
Firstly, its worth remembering that if you fail to opt into any plan then you you will be assigned to the ‘REWARDS’ plan.
As for which plan you should select, it will depend on what type of bettor you are and what your modus operandi is.
My personal view is that the key factor here is to pay as little commission as possible. If you are a trader, backing and laying then undoubtedly the BASIC plan and the low commission option will be the best value. Similarly, if you take your betting seriously, you’re probably on the exchange because of the better prices on offer and 2% commission will be key in your long-term profitability.
If you opt to pay 5% or even 8%, not that I would recommend either of these options, then you need to be getting a good pay off in terms of the bonuses you receive. Possibly your motive for betting is not particularly to win, but for enjoyment and you are not particularly driven by the lower commission rates, maybe the other bonuses will prove more alluring?
10% Refund on losses
Certainly nice to receive but, setting out with the mindset to lose when betting is not a good approach. Yes, we all lose but, possibly giving up or minimising your stakes is a better option?
£2 or £5 free accumulator bet every month
I suppose this depends on your normal staking levels, if you normally bet in the £2 to £5 range then that may be a ‘nice to receive’ if hardly a deal buster.
You receive these free bets on the higher commission rate plans. Think about it in terms of commission you pay on your winning bets.
Winnings of just £100 on any one exchange market on a 2% commission plan and you are better off. You pay £2 in commission, versus £5 or £8 commission on the higher My Rewards plans. In one win of £100, the benefits of the £2 and £5 free bets are negated.
This is real money too. The bonus £2 and £5 free bets are just that, free bets. There’s no guarantee that you are going to be able to convert them into cash. You have to place an accumulator and then win!
Betfair Cash Race
Cash race is similar to store loyalty schemes, the more you bet the more points you are awarded. Points are converted into cash rewards.
Every 10 pence in commission and implied commission earns you a point in the Cash Race. I’m guessing that Betfair may vary the value of the prizes for each target dependent on your value to them as a customer. I don’t know that, I can only view the targets on my account. For this piece, I can say that I need 1000 points (£100 in commission/implied commission) to hit target one. This earns me £8.
Calculating the value of this on one of the higher commission plans versus being on the BASIC 2% plan and not qualifying for the Cash Race is difficult. Primarily because points are awarded not just on winnings (for which you are charged 2%, 5% or 8% depending on your chosen plan) but also on implied commission i.e. stakes of losing bets (which you don’t pay any £note commission on.
What I would say is that loyalty schemes like this are operated across many industries. They are good and popular. For sure, the budgeters and financiers design the numbers behind these schemes, and not one will have ever been built to provide a negative financial impact on the company’s bottom line. They reward loyalty, but that is returned in £notes by the customer.
Betfair Beat The Drop
Beat the drop is fun to play, but it’s that, a novelty. If you’re into casino-style games then I can see the attraction.
In terms of value, £32k starting pot, 15 questions, if you split the pot evenly on each question you’d end up with 98 pence after answering 15 questions. You need to split your pot unevenly across your predictions to take any great money to the 15th question. 15 correct predictions are in itself incredibly difficult.
Betfair Sportsbook Best Odds Guaranteed
When opting for the BASIC plan and 2% commission, in addition to no access to any of the bonuses, Best Odds Guaranteed on the Betfair Sportsbook is removed.
If you’re purely an Exchange user then this will have absolutely no impact.
Betfair Sportsbook does seem very quick to apply stake restrictions to horse racing prices. I’ve only used the sportsbook on a handful of occasions over the years and had stakes refused and cut after that small sample of bets.
If you are a Sportsbook user, then most of Betfair’s competitor’s sportsbooks offer Best Odds Guaranteed. It’s unlikely to cause many issues in switching your business to a competitors site if your betting strategy involves taking prices with Best Odds Guaranteed.
My overriding advice would be to opt for the 2% commission of the BASIC My Rewards Betfair plan.
Can I change Rewards plan after I have opted in?
In your ‘account page’ you can change your Betfair Rewards at any time but, changes will not take effect until the first day of the following month.
If you want an immediate change to your Rewards plan then you need to contact Betfair Customer Services. In changing your plan immediately you forfeit any benefits you are currently wagering towards.
Summary of the My Betfair Rewards plans