A betting exchange is a site where players can place wagers against each other rather than a bookmaker. One bettor backs (buys) a selection, and another lays (sells) it. Out of all the betting exchanges, Betfair is the oldest an d biggest in the world and offers by far the highest liquidity. You might be wondering how a betting exchange makes money. The answer is through charging a small fee on bets placed. Unlike most exchanges, the Betfair commission, or Market Base Rate (MBR), applies only to winning wagers and ranges between 5-7%, depending on the country. Compared to other sites, this is relatively high, but there are some ways to reduce it. By collecting Betfair points, you are entitled to a discount every week. Lately, you can also choose out of three reward plans, each providing different incentives and commission rates. Read on to find out all the ways you can utilize to reduce the Betfair exchange commission and what other types of charges you may qualify for.
What is the Betfair exchange commission per country
Obviously, the exchange is not available in every part of the world. For those who are allowed to register, the Betfair Market Base rate fluctuates based on the country of residence. In the UK and Ireland, it starts from 5%, while in Croatia and Serbia it can be as high as 7%. In the table below, you can see the standard Betfair commission rates in every country:
|UK, Ireland, Italy, Gibraltar, Malta||5%|
|Rest of World||6.5%|
|Albania, Armenia, Croatia, Monaco, Serbia, Montenegro, Slovakia||7%|
What are the Betfair allowed countries and restrictions
Just like any other brand, Betfair does not accept players from every country. In some cases, like in Austria and Germany, bettors can only sign up at the sportsbook, not the exchange. In addition, due to the complexity of regulating this alternative way of betting, it was forced to exit some markets. Underneath, you can see a list with all the Betfair exchange allowed and restricted countries. We have also created a mechanism, where you are able to see if you can register, if the button ‘Betfair allowed countries’ appears on your screen.
How does the Betfair Premium Charge work
Successful players have to pay an additional fee called the Betfair Premium Charge. It is calculated based on the difference between total profits and commissions generated. You will qualify for it once you meet the following criteria: your account is in profit (lifetime), you have bet on more than 250 markets, and your total charges are less than 20% of your profit. Once you become eligible, you have a lifetime allowance of £1,000 against the Betfair Premium Charges. After that, you will have to pay a 20% charge on your profits every week, minus the commission you generated. Let’s see a practical example:
This week you had a total profit of £1,000, which means the premium charge (20%) would be £200. If your commission were £50, you would pay an additional £150 to make it an even £200.
If players manage to earn £250,000+, then the Premium Charge increases even more and can be as high as 60%. Of course, it is not easy to reach this level of profit, but you can see why betting at the Betfair exchange might become pointless. There are some ways to reduce the Premium Charge, like arbitrage or generating higher commission, but these are easier said than done. Betfair is always on the lookout, and there have been incidents in the past where it removed a lot of funds from bettor’s accounts for trying to avoid charges.
Betfair Turnover charge
Besides the Betfair commission and Premium Charge, there is another fee called the Turnover Charge. However, it only applies to users from Australia. Three conditions must be met before it is enforced. Firstly, players must have matched back bets on at least one market from Racing NSW. Secondly, the aggregate value has to be A$6,000 or higher. Thirdly, the total commission is less than 1.25% of the total value. The Betfair Turnover Charge is 2.4% and is separate from the Premium one.
How to reduce the Betfair commission rates
As you can see, there are several fees you might encounter while betting on the exchange. Keep in mind, though, that the site only changes winning bets, not losing ones. You cannot avoid fees altogether, but there are ways to reduce the Betfair exchange commission rate considerably. From collecting points to changing your rewards scheme and choosing a different platform, let’s have a look at everything you can do to decrease your charges.
What are Betfair points
The most straightforward way to lessen the Betfair commission charges is by collecting points while betting. Players will receive 1 point for every 10p of commission paid. However, the rule about winning-only bets does not apply here. You will also get Betfair points for lost wagers. Betfair will calculate the implied commission (i.e., how much you would have paid if your bet had won) and award you points accordingly. Depending on how many you have collected, you will automatically get a discount on your commission. As long as you have accumulated more than 1,000 points, you will pay lower fees. Note that the discount rates differ from country to country. Both your points and the discount will be displayed in the ‘My Betfair Account’ section.
How high are the Betfair commission discount rates
When you register, the discount rate is capped at 20%. However, if you complete the verification requirements, it can be as high as 60%. To get the maximum Betfair commission discount, you must have collected at least 150,000 points. If you know the Market Base Rate that applies to your account and the discount you are eligible for, you can calculate your commission by using this formula:
Commission = Net Winnings x Commission % x (1 – Discount Rate)
If your net winnings in one week are £400, your MBR 5%, and your discount 40%, then you would have to pay £12 commission. Up until a few years ago, the charges were set by Betfair, and players were not able to alter them besides collecting points. Nonetheless, a new reward scheme was introduced, where bettors can choose their personalized Betfair exchange commission. There are three different plans:
- Basic: The commission is 2%, but you will not be eligible for any type of promotions, like Welcome Offers, Best Odds Guaranteed, Free Bets or Moneyback.
- Rewards: The commission is 5% and you will receive a £5 Exchange Free Bet and one Odds Boost on selected events every month.
- Rewards+: The commission is 8%, but you will get a 10% refund on your losses, as well as other promos such Free Bets, Free Spins, and multiple Odds Boosts every month.
Most bettors elect the Rewards option, which contains the default Betfair Market Base Rate. At the start of each month, you can switch the rewards package based on your betting needs. You can only do that once every month.
Betfair holiday explained: How to freeze your points
Betfair points are awarded for being active in the betting exchange. If you do not use it regularly, there is a 15% reduction on a weekly basis. So what can you do if there are not a lot of events that interest you? You can actually freeze your points for a week by booking what is called a ‘Betfair holiday’. Within the week, your points will remain stable no matter what. You can still place wagers, but you will not receive any points for them. In addition, you can cancel the freeze period up to 3 hours before the reduction would have been applied. This happens every Sunday at 9 pm GMT. You are credited with a ‘1-week freeze’ when you sign up and an additional one once every three months. Betfair only allows you to freeze your account up to four times.
Betting Exchange Alternatives
If you live in one of the Betfair restricted countries or you are not happy with how high the exchange commission is, you should look for an alternative. Some traditional betting sites, like Ladbrokes and 1xbet, have an exchange section, too. Moreover, there are also pure betting exchange alternatives trying to compete with Betfair for years. For example, Matchbook offers a 0% commission on the top leagues and markets. Others, such as Betdaq and Smarkets, come with a commission that ranges between 2-3%. However, don’t forget that most exchanges might have lower fees because they charge both winning and losing bets. Betfair still has by far the most liquidity, which is preferable when you want your wagers on less popular markets to be matched. For betting alternatives check our online bookmakers rating.
It is evident that Betfair has taken advantage of the fact that it is the oldest exchange and has the highest liquidity to charge some steep commission fees. Even though it has lost a significant market share in recent years because it had to close operations in some countries, it still is unrivaled. However, you can see that it has already taken measures against that by introducing the new rewards scheme. Fees like the Betfair Premium Charge or the Turnover Charge are not exactly fair, but this is the price you have to pay. If you enjoy wagering on less popular markets, the chances are that you won’t be able to in other exchanges. This is why the Betfair commission is high compared to the competition. Nonetheless, if you are not a super successful bettor and play regularly in the exchange, then there is no point in not holding an account with Betfair.
Unlike traditional betting sites that include a small margin into the odds, betting exchanges profit by charging a small commission on bets. Betfair only charges winning bets, and the commission ranges between 5-7% depending on the country of residence.
No, at least not the whole commission. However, there are some ways to reduce it. First, by collecting points you can lower the fees up to 60%. In addition, with the new rewards scheme that Betfair introduced, you can select your own commission among 2, 5, and 8%.
Players from the UK and Ireland are charged 5% commission on every winning bet. The same fees apply to bettors from Italy, Gibraltar, and Malta as well. However, in some countries like Croatia, Serbia, Montenegro and Slovakia, the standard Betfair Market Base Rate starts at 7%.
This is an additional fee that lifetime winning accounts may qualify for. If you have bet on more than 250 markets but haven’t generated commission higher than 20% of your gross profits, you will have to pay the difference. It is calculated on a weekly basis.
If you want to take a break from betting on the exchange, Betfair allows you to freeze your points for one week. You can still place bets, but your points total will not change. When you sign up you will receive one freeze week and one more every three months of using the exchange.
This is the easiest way to reduce the Betfair exchange commission rates. Essentially, you are awarded points for every bet placed, both winning and losing one. Depending on the number of points in your account, you can receive a discount on the commission of up to 60%.