Gamblers line up their bets for the British election
IF PRIME Minister David Cameron forms Britain’s next government after the tightest election in a generation, it will not just be the Conservative Party leader who will be smiling. Scott Moorhead will be laughing all the way to the bank.
As part of a record £100 million (R1.8 billion) expected to be gambled on the British election, Moorhead stands to win £250 on a £500 bet that the Conservatives will win most parliamentary seats in the May 7 election.
“I think there is a bit of money to be made,” Moorhead, who works in advertising in London, said. “Bookies call it right more often than not so you are backing some fairly odds-on chances.”
Betting markets
In the most unpredictable British poll in recent times, opinion polls indicate neither the Conservatives nor the Labour Party will win an overall majority as once fringe parties challenge the certainties of the post-1945 two-party system.
The stakes are high. If Cameron wins, he has promised a referendum on EU membership, while Scottish nationalists have offered to shore up a future Labour minority government in the event of a hung parliament.
In such a tight fight, a clue as to who will govern Britain’s $2.8 trillion (R33.1 trillion) economy may lie among the gamblers and bookmakers who have risked cash on the outcome.
Bookmakers currently have the Conservatives as favourite to be the largest single party, although the odds also suggest Labour are most likely to form a minority government.
Odds indicate gamblers expect there to be a late swing to Cameron’s Conservatives as polling day nears.
“When the betting markets say one thing and the polls say another, the evidence suggests that it is a good idea to go with the markets,” said Leighton Vaughan Williams, the director of the Betting Research Unit at Nottingham Business School.
“I’ve interrogated huge data sets of polls and betting markets over many, many years in the US and the UK and basically the betting markets are very, very accurate predictors of the outcome of elections, and certainly compared to polls.”
Gambling
He said he could think of no recent examples of betting markets getting it wrong and cited the Israeli election last month as an example of the prediction market getting it right.
Prediction markets, which make forecasts but without the money involved in betting markets, saw a healthy win for Israeli Prime Minister Benjamin Netanyahu two weeks before he won. The last polls before the vote showed his Likud party trailing.
Predictwise.com is forecasting that Cameron will be the next prime minister with his Conservatives winning most seats.
With about £300m gambled on the Grand National steeplechase alone, political betting is still dwarfed by the wagers on horse racing and soccer in Britain.
But with the size of political bets rising, it is now serious business for Britain’s £6.3bn gambling industry, dominated by the likes of traditional bookmakers Ladbrokes and William Hill, but with internet gambling firms such as Betfair growing as online betting increases.
Vaughan Williams said up to five times as much money could be bet on this election compared with the last national ballot in 2010, and bookmakers said the figure would exceed the previous record amount laid during the US presidential vote in 2012, making it the biggest non-sporting betting event ever. – Reuters