One of our long term commenters Tochais Soirai gives fellow readers a few last minute tips if you are thinking of having a last minute flutter on the election.
Thinking of having a bet in the last days of the campaign? If you do, you’ll be part of a long tradition. The earliest organised political betting is often cited as the elections to the Great Council of Genoa in 1515 whilst in Britain political betting became very popular in the regency era with the betting books of London clubs such as Brooks and Whites full of political bets. In 18th century Dublin, there was an actual physical link between politics and gambling – the colonial Irish parliament in College Green had a much used secret passageway to the luxurious Daly’s gambling club across the road.
The first time odds were offered on a political election in Britain by a bookmaking firm was in 1963 when Ladbrokes opened a book on the Conservative Party leadership which was won by the 16/1 shot Alec Douglas-Home (the 5/4 favourite for the job was somewhat appropriately, Rab Butler who as Home Secretary had changed the face of British betting with the 1960 Betting and Gaming Act which legalised high street cash betting shops).
The profits made by Ladbrokes were modest but the publicity was priceless as it put the company on the front pages of the national and international press who were fascinated by the idea of betting on politics in the same way as people bet on horses. However, the same company nearly went out of business after the 1964 General Election when a very narrow Labour victory prevented losses of £1.5 million.
Since then betting has increased dramatically election on election and political betting is now very serious business for Britain’s £6.5 billion betting industry. Political betting attracts punters who don’t or won’t bet on anything else. People who don’t have a clue about the 2.40 at Doncaster or Saturday’s Premier League (or even can’t remember who they support) will pop into their local bookies with surprisingly large amounts and back their political instincts.
There will be around £100 million bet on the UK election (around £300 million was bet on the Grand National) making it the biggest non-sporting betting event ever for British bookies. The exponential growth is phenomenal with up to five times as much money bet this time around compared to 2010.
Both the polls and the markets agree no one will win an overall majority and both agree that the markets give the Tories the edge on seat numbers with Labour most likely to form the government. The only thing to be sure of is that if this likely scenario changes, the markets will indicate it before the polls do.
Ok then, a few things to look out for
The 1992 UK election was a classic. Many people wouldn’t admit to the pollsters they were voting for the Tories but they did and the markets knew it because the Tory odds didn’t reflect the polls. The polls said Kinnock, the money said Major. And where they disagree the money is usually better at predicting the outcome. Will it be a factor this time? Are there significant numbers of UKIP voters who aren’t declaring to the pollsters? Unlikely but you never know.
The markets aren’t right all the time and this is one of the reasons why – people often bet with their hearts rather than their heads. Classic examples are Irish horses at Cheltenham or England at the World Cup where both tend to be slightly poor value because people are betting with their hearts and bookies are adjusting to odds to allow for liabilities. In the early days of spread markets, big betting (and Tory supporting) City traders skewed the odds and playing a significant role in the market’s huge underestimate of the Labour victory which brought Tony Blair to power in 1997.
Basically, this is the placing of substantial bets in order to reduce the odds in an attempt to create momentum for a candidate. Virtually impossible to do so in a general election where the market is so liquid and it takes a lot of money to change the odds. However, it can be a factor in individual constituencies and smaller contests such as by elections, local elections or a leadership battle where a relatively small amount can shift the odds. In the 2006 Liberal Democrat leadership contest it was claimed that supporters of Chris Huhne bet on him to make him the front-runner in the betting market although it proved fruitless in the end as Menzies Campbell won the election. Independent candidate Bernie Murphy took it one step further in a Cork City council election in 1985 when he advised the electorate to back him at 50/1 and then vote for him. It worked and he took a seat.
Modern bookmakers are always on guard against anyone with insider knowledge and rank outsiders especially tend to be poor value as layers are cautious about political insiders taking them to the cleaners (as Clement Freud did back in 1973 when famously backing himself heavily to win the Isle of Ely by-election at 33/1). For example, one layer has the SDLP at an unbelievably short 12/1 in West Belfast when a more realistic quote would be to add a zero onto the 12.
Insider knowledge won’t be a major factor in betting on markets such as seat numbers but large bets on markets such as individual constituencies and government formation will be monitored closely. Anybody who knows the inside track on discussions between Labour and the SNP or the Tories and the DUP or what the Lib Dems will do to stay in power could be on a nice little earner and the bookies know it. In 2000, Labour MP Frank Roy was rebuked by a parliamentary committee after he bet on Michael Martin at 20/1 to become House of Commons Speaker.
And did some Tories benefit from insider knowledge to successfully bet on Michael Howard being elected unopposed as Conservative leader in 2003? Is the Pope a Catholic?
A ‘wisdom of crowds’ type forecasting mechanism where people predict outcomes. One prediction market website, predictwise.com correctly forecast a significant majority for Benjamin Netanyahu in the recent Israeli elections when the polls showed his Likud party trailing. A bit of fun if you don’t want to risk anything.
Will the betting stop as soon as the polling booths open? It would have a couple of decades ago. Not now. In running betting is an integral part of betting on virtually all events. Nevertheless, large bets on polling day will be treated with caution as there will some sharp operators among the political foot soldiers who will be good readers of any changes in the mood on the street on polling day.
Betting against the flow in cases where a herd mentality has kicked in. Think 1929 stock market crash, when the shoeshine boy is offering you tips on stock prices it’s time to sell. Short odds don’t mean a certainty, you can’t buy money. In this election, the Tories appear to be a shoe-in for the highest number of seats. They do justify strong favouritism alright but odds-on 1/6 or even shorter. No. There are too many variables, UKIP won’t take many seats but they will take votes, the expected late Tory surge isn’t guaranteed and Cameron is not having a good campaign. Anything above 4/1 on Labour here should be considered even allowing for Scotland being a complete disaster for them. (Bearing this in mind, if you’re a spread bettor the current line on the Tories getting 290 seats looks a little high).
Tips? As the old saying goes, don’t tip me a winner, tip me a price. The markets say the most likely outcome is a Labour minority government. And they’re right. But some bookmakers are as short as 6/4 and as of now this is poor value. Keep your money in your pocket at these odds.
However, if you can get anything over 2/1 then it becomes a half decent bet. Which brings us to another tip. There are significant odds variations in all the markets being quoted so if you’ve decided on your bet, the best tip of all is to use the odds comparison sites and shop around for the best price.