Punters ahead of markets in calling result

Punters beat financial markets by an hour when it came to correctly predicting Brexit on referendum night, creating a golden opportunity to cash in, a study has found.

Research by Cambridge University found gamblers sensed the Leave result coming earlier than currency experts, after the polls closed for the June 2016 Brexit vote.

Economists studied the behaviours of the Betfair betting market and the sterling-US dollar on the night of the vote, and said the financial markets lagged behind as the results were announced.

This created an hourlong “close to risk-free” arbitrage window in which the price difference between betting and financial markets yielded up to a 7% return.

Researchers said the findings support the idea that gambling might provide better forecasts of election outcomes than either experts or polls.

“It looks like the gamblers had a better sense that Leave could win, or that it could at least go either way,” the study’s lead author Dr Tom Auld said yesterday.

Dr Auld said both betting and financial markets were in fact slow to react, given the information flooding in from vote counts.

He said this showed there was a “behavioural bias” at work as both markets had believed Remain would win before the votes were counted.

“Initially, both traders and gamblers could not believe the UK was voting to leave the EU,” Dr Auld said.

“But this disbelief lingered far longer in the City.”