Is it being scrapped?

Sorry for the lack of write ups, I have been busy these last few days as I became an Uncle. Anyway onto the issue of Betfair.

There are rumours circulating this evening that the Premium Charges are going to be scrapped before they have even come in and be replaced by a change to the current commission structure. It has been heard that the commission structure will change from the current 2% to 5% to 2.5% to 6%. Now whether or not this is better for me I do not know yet - I think it is likely to be.

But has the damage been done already?

To be honest I think that a lot of damage has already been done but I don't think people will switch to another exchange if the Premium Charges are scrapped, as it what normally happens people will kick up a fuss but still carry on and a few weeks later everything will be forgotten. I hope this doesn't happen and we at last get some much needed competition into the exchange market.

I have been very busy reading all the forums discussing the topic over the last week and I am amazed at how people react to certain type of exchange users. I think Peter Webb's post he did on his blog during the week about the 'ecosystem' summed it up great. I think we all feed off each other, traders need punters who need arbers etc etc etc... take one level of the food chain out and you have trouble.

Unfortunately Peter has since removed the 'ecosystem' post and a few other posts relating to the charges - not sure why as they did not seem to be knee jerk posts - answers on a postcard????

I have been in discussions with Betdaq with regards to software for their exchange. They unfortunately have not been in a position to capitalise on this own goal by Betfair and although Betdaq have their own software about ready it is not yet ready. Those who have read the blog for a while now will remember my earlier discussions about this software. It seems they will have their software ready in some format by the end of this month but 3rd party vendors will not have anything until perhaps November that is ready for mass roll out. Some providers it seems already have things being tested but nothing for the general public as yet.

If Betfair do press ahead with these Premium Charges I do not expect any mass exodus next Monday for several reasons:

1. The £1,000 allowance - for myself I think it would take a few months for me to use this up, so I assume there will be several others in this boat. However, the middle to big hitters will use this up much quicker, I know some people that will use it up in the first week or two.

2. The lack of software. I, as do most traders, use software to trade on Betfair. Until this is in place people will not be able to move their business over. If the 3rd Party software is not available until November it will delay people moving.

3. The current lack of liquidity. A lot of people on the BF forum seem to think that Betdaq will instantly be like Betfair is now. I think a lot of these people have not used exchanges for long enough to remember/know where Betfair has come from. I have used the site since 2002 and have seen it change and evolve over that period. the markets have become more in number and more in liquidity. This is a process Betdaq will have to go through. Liquidity leads to more liquidity etc.. and as people populate Betdaq more, more markets will be added.

So with things up in the air there is likely to be a lot more speculation as to what will happen come Monday 22nd September 2008. Will we see the charges come in and the move to Betdaq or will Betfair back down and Betdaq miss their 'final' chance????