Lets all discuss please the new Betfred 15% deductions.

[GFPC]

Recently affiliates have got this via email.

We're writing to inform you that as of October 1. 2011, we have made an adjustment to our calculation of Net Casino Revenue and Net Poker Revenue at Betfred Affiliates. This adjustment reflects the correction of an omission in our previous net casino revenue and net poker revenue calculations, with regards to certain direct variable costs associated with these products use (specifically payment processing fees, royalties and taxes).

As such, you will now see that 15% of gross casino revenue and gross poker revenue is deducted as a cost in the calculation of net casino revenue and net poker revenue respectively (whereas previously only 1% was deducted).

We understand that this change may have a negative impact on your earnings. We hope that you will understand that these are real, direct variable costs which affect our incoming profit from our casino and poker products, and in accordance with the Betfred terms and conditions (see item 6 - Payment https://partners.betfredaffiliates.c...conditions.asp), they should be accounted for in the calculation of net revenue. In order to continue to offer our competitive commission rates with no negative carryover, it is essential that we correctly account for costs in the calculation of net revenues, on which these commissions are paid.
If you have any questions or concerns about this change, please do not hesitate to get in touch with our affiliate team. We value your partnership immensely and look forward to working with you through the remainder of 2011 and in the new year.
Thanks
The Betfred Affiliate Team




Note: Considering to promote Betfred and do not really understand the bottom line here on what affiliates will lose on. Does this mean its 15% reduction of gross revenue? If so that would mean affiliates working on 35% rev share are actually working on a 25.5% rev share based on something I read earlier.


Please can the AM relate some factual information on this.

[HodgeyBoy]

Hi GFPC,

The 15% deduction from gross to net on Casino and Poker was always levied against Betfred by the software providers and has always been outlined in point 6.3 in the Affiliate Terms, we just weren't passing this on to affiliates even though the terms said we did.

I don't want to come off as if I'm expecting anyone to actually be gratefulfor the fact that we weren't actually passing this levy on and I appreciate it will impact our affiliates.

This levie is applied to the Betfred Gross figure to arrive at Betfred Net

Betfred Net is the same as your Affiliate Gross which then has charge-back and player bonus deducted to arrive at an Affiliate net figure, of which you would then received your revenue share.

Betfred Gross - Player winnings, operator level taxes/royalties and transaction costs etc = Betfred Net (this is the same as your Affiliate Gross figure)

Affiliate Gross - player bonus and player chargebacks = Affiliate net

Hope this helps

[justbookies]

If so that would mean affiliates working on 35% rev share are actually working on a 25.5% rev share based on something I read earlier.
Please can the AM relate some factual information on this.

I was not that good at maths at school, but I reckon 30% rev share (not 35%) nets down to 25.5%. Here is my homework:
$1000 gross revenue - 15% deduction = $850 x 30% rev share = $255 affiliate commission = 25.5% of the original $1000.

What I would say is that many affiliate programs would have made this change under the radar, hoping it slipped by affiliates unnoticed. I think it is to Betfred's credit that they have been transparent about this apparent error.

[Christoff]

I would say Betfred Affiliates have done the right thing here - they are very upfront and transparent.

Many operators deduct fees (most do in fact) but some tend to hide them.

[theGman]

I would say Betfred Affiliates have done the right thing here - they are very upfront and transparent.

I got this mail this morning and emailed them a few questions re the charges. Still have not recieved a reply.

I dont think that there is any transparency here. They are simply blanket charging all of their affiliates 15% by the looks of it , so if i am for instance a Bingo Affiliate , why would i be wanting to loose earnings due to them having to pay a British Horseracing levy ?

Can we actually have some transparency and find out how you get to this 15% figure . What are the charges that you incur that cause us to be charged this 15%.

That would be providing transparency i think. As it stands , you could just be charging us anything you wanted and we would not have a clue as to why. I am not saying you are , all i am saying is - tell us why its 15%



Its

[HodgeyBoy]

Thanks for the question Gman,

The 15% that is levied against affiliates only applies to Casino and Poker activity as a result of the charges made by the software providers themselves. There is no increase in deductions for revenue generated by our other products.

No wagers or bets made on betfred.com have a deduction for or contribute to a payment to the British Horse Racing Board of Control. This is because we are licensed and operate out of Gibraltar. Only bets made in our shops or from bets made via our UK Call Centre incur this.

Whilst I'm obviously grateful for those posts supporting the way we have done this I won't ignore any questions from those that aren't impressed. It is true that all operators will make deductions of some kind or another and that many of them will not be transparent about this I am happy to be as open as I possibly can about this issue.

[theGman]

Thanks for responding

For Casino and Poker you operate on Playtech - am i correct ? Can you be more transparent then merely saying - it is down to charges levied by Software providers.

How did you arrrive at the 15% mark - moving from 1% to 15% is an absolutely massive shift.This is not about other operators and their transparency , this is about a massive charge of 15% levied by Betfred. This is in addition to affiliates being charged quite rightly for bonuses and credits. I am failing to understand what the 15% charge is for.

Can you enlighten me please. It would be much appreciated.

[jarvi]

There was a discussion about this email in the private area too. Obviously we all have a different idea of what transparency is because I hardly think Betfred Affiliates are being transparent. Sure, they have sent an email out, however, where on the website does is outline the amount of these deductions? Perhaps I missed it. All I see is commission percentages, terms that state the types of deductions with no amounts/percentages and statements like the following:

Affiliates can choose the Revenue Share Model which pays 20%- 35% of each Referred Player’s net losses / rake, every month, for the lifetime of that Referred Player through a tiered commission program.

With the 15% deduction (at a minimum) there is no way anyone will ever receive 20% of the referred players net losses using the generally accepted definition of net losses. Transparent? I think not. Or am I missing something? Perhaps if you show us an example starting with a player deposit, they lose the entire amount, then how much will the affiliate receive, it might help us to see it more clearly. Maybe start with $1000 to make it easy.

[HodgeyBoy]

HI Jarvi - thanks for the question

You can find the complete definition of affiliate net revenue in the terms and conditions here at point 6.3: http://www.betfred.com/affiliates/terms-and-conditions

If you compare this to other definitions at other programmes I think you'll find that it is fairly standard. As we have made a public statement to our affiliates about this you'll all now be aware that the deduction for casino and poker software royalties is 15%.

This information about the percentage of deduction is usually not made public as it is deemed commercially sensitive. In this case, we felt it was right to be clear about the amount as it arose from our mistake. I knew that saying nothing was not an option as the effect on affiliate revenues would eventually be noticed creating rumour and suspicion and much more negativity than anything seen here so far.

@Gman - The reason it is 15% is that this is what the software provider charges us to use their product.

[jarvi]

Hodgyboy, I'd still like an answer about where it outlines the amounts/percentages. Telling me there are a bunch of deductions and not saying how much they are is not being totally transparent. I still think an example would help and if you don't want to do it, I'll do it and you confirm it is correct or not.

As for Gman's question, are you able to elaborate on how the software provider comes up with the 15%? Does it vary for each program? That might help us be more comfortable with just why it is that high.

[HodgeyBoy]

Hi Jarvi -

the exact deductions are almost always considered commercially sensitive but I'll see what I can do - just try asking some other bookies and see how you get on!

I know how I would like to respond to your question but I don't want to make promises when the decision will not be mine.

As for how they arrive at 15%, that's for them to decide. I don't know if all operators on the same software face the same charge, I do know that 15% is what we are charged.

Hopefully I'll be able to be of more help shortly.

[theGman]

I think that there is something very wrong with this situation , something is just not gelling in my head re these costs.

Hodgy , you are telling us that the 15% charge are due to Royalty costs that the software provider is charging you and that this is being passed onto us.Is that correct?

If that is the case , why would affiliates be charged 15% , that equates to paying for Betfred to do business . Surely that cant be correct when you are only paying us a percentage of what players loose. Surely we should only pay a % of the charge not the whole whack.

To charge us the full amount for Betfred doing business is a bit harsh i think. Am i interpreting this correctly because as i pointed out previously there is no transparency here and i dont know what the charges are for.

Surely from a legal point of view we should know these details if we are being charged for them.

[jarvi]

Anthony I'm guessing you know where I'm going with this. Below is an example and trying to use the wording from 6.3 of the terms. Is it correct?

I guess it all comes down to the definition of the word 'net' in relation to player net losses. To me that implies the money they deposit and lose. I'm guessing from your point of view it means the same as net revenue as per 6.3. If that's the case why not use the same terminology across the website? You actually call it Referred Player Value on the Commissions page as well.

Please understand I know this is the same as virtually every other program, I just took offence to your email because it said the change 'may' affect earnings, when as I see it, there is no way it would not affect earnings. Plus, would you just accept an increase from 1% to 15% for one of your costs?

Being slightly more open than other programs doesn't make things transparent, it just makes your program slightly better than an otherwise very ordinary bunch. This is more about how programs treat affiliates and play with the truth (by using inconsistent terminology) rather than how it affects my earnings because I don't earn with Betfred Affiliates.

[mojo]

This mirrors the same thread at AGD with Nordicbet.

http://www.affiliateguarddog.com/for...cks-t3815.html

From Shaun Oneill

If check your report it actuallt states chargeback/admin fee, the reason is shows every months is that we clearly show the 15% admin fee in the report as per our T&Cs.

The reasons given here are the same as given there.

Kind of like when Captain Cooks did the same thing before they were Rewards and Integrity. Around 2002. It was called 'Royalty Fees' back then.

It's the cost of doing business hodgy and shaun. Why are you passing that on to affs? You knew that when you started your business that this fee exists. You handled it. Suddenly you enact the 15% and your explanations are similar.

That is YOUR cost. Not affys. From day one you knew this. Yet, here it is 2011 and you decide to enact it. Sounds like another program in trouble.

Bad business? To many conference expenses that you attend every time? What's the deal?

If you tell us honestly, I think many affiliates would be understanding and try to help. Let us know what we can do.

[jarvi]

Just to clarify one thing. I don't necessarily have an issue with a percentage of the variable costs being passed on, my problem is with the advertised revenue share percentages and the way the truth is played with to make things sound better. Kind of like the travel websites that advertise a flight for $100 and then when you book it there are another $150 of fees and taxes. Or the hotel room at $100 and an extra $20 for a compulsory resort fee.

Thanks for the link Mojo, I wasn't aware of that thread and good to see the few participating here are not alone.

[mojo]

I wouldn't mind sharing the cost as well as long as it is honest.

[slotplayer]

.

That is YOUR cost. Not affys. From day one you knew this. Yet, here it is 2011 and you decide to enact it. Sounds like another program in trouble.

this issue makes me wonder if my big player really self-excluded.

[HodgeyBoy]

Hodgy , you are telling us that the 15% charge are due to Royalty costs that the software provider is charging you and that this is being passed onto us.Is that correct?... ...Surely we should only pay a % of the charge not the whole whack.

Appreciate the question Gman, so I hope I can clarify this for you and Mojo as you both raised similar points...

the whole value of the 15% royalty fee charged by the software provider is not deducted from your revenues for each Casino or Poker player. However, as affiliates you do share that cost with us at the same percentage rate at which your rev share deal is set. This is true of any costs that apply to the player. When they win a bet or when they chargeback, for example, we don't pass on the entire cost of this to the affiliate but they do share that cost with us at the same percentage rate at which they earn revenue with us.

The only exception being player bonus which, as with all other programmes I know of, gets deducted in entirety from the players revenue.

All other costs that apply to the calculation of Affiliate Net Revenue are shared between Betfred and the Affiliate in exactly the same way that we share the profits that come from these same players.

Just to clarify one thing. I don't necessarily have an issue with a percentage of the variable costs being passed on, my problem is with the advertised revenue share percentages and the way the truth is played with to make things sound better.

@Jarvi - you make a fair point regarding this and we'll take a look at how we are describing things as well as the definitions and terminology that is used to see if we can make sure that things are consistent and clear - thanks for the heads up

[Nodepositworld]

I do not promote BETFRED but I can appreciate that at least they told affiliates about the numbers.

[slotplayer]

I 'd like to see my player withdrawal amounts. I can't image that stat not being incorporated in the IA design.