Thursday, 29 August 2013

Election Betting - from a bookmakers viewpoint

Through personal experience and also information from former colleagues I am able to provide a bookies perspective when it comes to election betting. Hopefully this little insight is interesting.

Bookies and election betting

The genesis of election betting goes back to the days well before the relaxation of state based advertising restrictions – some might argue a preferable time to the current situation where you see the likes of Tom Waterhouse appearing regularly on the TV – however that’s another story.

The relevance of the advertising situation was that operators who held a licence in the Northern Territory could not advertise in the more populous states.

One way to circumvent the restrictions was to offer odds on novelty events which from time to time would be covered in the mainstream media.

Betting events such as elections were certainly of interest to media types looking for a new story angle on politics. This was a good result for the bookie as it also generated a little bit of free publicity in jurisdictions where they were not able to advertise (and were generally dominated by the TAB).

The other benefit of election betting is that it attracts clients to the operator that may not otherwise have a bet. At the last federal election on of the larger bookies received nearly 1,000 new clients who had their first bet was on the election.

At the time it used to cost (on average) around $200 to get a new client (it is significantly higher now), hence it was a good exercise from a bookmakers perspective, although less than 30% went on to become regular bettors.

Framing of Betting Markets  

While people may wonder whether the bookies have access to any additional information that the general public doesn’t, in previous experience this isn’t the case.

The odds are framed based on the publicly available information – information from the electoral commission, published polls, media information etc.

Thereafter it is contingent on the bookmaker to be on top of any new information circulating, which can be a challenge sometimes when the bookmakers do not generally have a dedicated resource to oversee the election betting (certainly not in the past anyhow).

As you would expect the most effective ‘tool’ used in setting the odds is ‘informed money’. With plenty of private polling available to political parties invariably you will get ‘found’ on individual seats where local candidates / issues have an impact on polling that could not be foreseen from the public information.

On the smaller markets, such as seat betting, the betting limits tend to be a lot lower than the overall winner market and hence you do not risk outrageous amounts to get that information.

Do Politicians / Related Parties Bet

While it is not commonplace it most certainly happens – happily I can never recall a politician betting against themselves!

On a previous election we were offering a market on the date of the election and we got hit on what proved to be the correct date. A little bit of googling revealed that it was likely that at least one punter would have known the outcome given his likely affiliation with one of the parties.

That is a cost of doing business sometimes in the betting game.

Significance of Election Betting

An event such as the federal election holds a significant amount of turnover, although it needs to be considered that betting on the Federal election generally goes over three years.

For the last federal election one of the biggest bookmakers held a tick under $4m across all betting markets. To put that into context it was nearly 90% more than what was held on the State of Origin series that year.
The biggest bet recorded that year was $200,000 (although I note that Sportsbet published a bet of $750k recently).    

And finally.... Do Bookmakers Win Plenty on Election Betting

From experience – No.  Across the 2007 and 2010 Federal elections the bookmaker referred to above won in 2007 and lost in 2010. Across both elections it was either break-even or perhaps a small win.

As  touched on above things such as seat betting are notoriously difficult to win at, as are some of the more ‘exotic’ markets, primarily as there plenty of people out there that have access to better information.

The aforementioned bookmaker had a fair result on Kevin 07, primarily as Howard had been well backed before the leadership change (to Rudd) at relatively short odds and then Rudd himself was well backed at short prices.

However from recollection the seats were no good as we got found in a number of QLD electorates where the swing toward the ALP could not be foreseen.   

Tuesday, 27 August 2013

The patient has a pulse .... barely

The Coalition's price has firmed and firmed and is now as short as $1.02 with at least one operator (suggesting a probability of victory of 98%). 

On the flip side the Labor Party has seemingly had the last rites delivered. The same bookie who was offering $1.02 on the Coalition is also offering $13.00 (12 to 1 in the old terms) about the Labor Party somehow conjuring a victory on September 7.

Obviously with the movement in the polls still seemingly trending away from Labor, and the election just 11 days away, there is little to suggest that the prices will do anything other than continue to firm. 

Hence if you are not averse to short odds you may want to look at the $1.07 on Betfair ($1.067 after 5% commission), otherwise look to the individual seat markets. That said I would find it hard to have a bet at those prices myself.      
If time allows in the coming days, I hope to provide an insiders perspective in terms of the bookmakers when it comes to election betting and potentially an overview of a few of the operators and how their offers stack up.

Wednesday, 21 August 2013

Perhaps a slow down in the Coalition momentum?

For a while there it seems like the Coalition were charging to a point where every dollar invested on them to win the election would return you a $1.01. However that trend has seeming abated in recent days.

Since the 17th of this month the median price for the Coalition among the bookies I am sampling has moved a mere cent and conversely on the Labor side there hasn't been any movement. Whether this is meaningful in anyway is debatable, but it suggests there is still a glimmer of hope for the ALP in the eyes of the bookies.

Interesting to note that the betting exchange has been wavering between $1.14 and $1.15 - it is back out to $1.15 presently and there around $5,000 sitting there to take at that price.

Latest tracking is below.

Friday, 16 August 2013

Is the election over?

You'd be excused for thinking this if the bookies are any guide. Betting prices have continued to firm, since the debate last Sunday night, for each and every bookmaker sampled. 

This comes off the back of some reasonably dramatic price cuts that had taken place prior to the debate. 

The Rudd camp has changed tack in recent days with a more negative approach, however it remains to be seen whether this will revive his flagging campaign or whether his ship has sailed!


Sunday, 11 August 2013

Bookies give the debate to the Coalition

While the individual channel audiences saw the result of the vote differently,  

Channel 9 audience: Labor 
Channel 7 audience: Coalition 
Channel 10 audience: Labor


Only two bookies, from a sample of ten, inferred that the debate result was positive for Labor and moved their prices accordingly, while five moved their prices in favour of the Coalition. Note that three of the bookies left their prices unchanged. More below:

Not a good week for the red team....

There have been abundant media reports to this fact and it is no surprise to see the latest price graph reflect that. 

The ALP's betting price is now comfortably out to it's highest level since the leadership change, with the median price moving from $3.13 just ten days ago to $4.75 this morning. 

It may appear a little more dramatic than it seems though, with the implied probability of an ALP PM moving from ~32% down to ~21%.

The pertinent question now of course is where to from here. Is Kevin Rudd sufficiently on the nose such that his fate is sealed, or does the camp have something up it's sleeve. 

My 'pocket' would love to see a change in the ALP's fortunes and like many political tragics I will watching the worm tonight with keen interest during the debate. 

This is one part of the campaign that is expected to favour Rudd and you can't help but think he may need a miracle if his fortunes don't start to improve from here. 


Thursday, 8 August 2013

Bookies have mixed views about Beattie's new gig

The late recruitment of Peter Beattie to stand as the candidate for Forde has not been the panacea that some may have expected, at least through the eyes of the bookies. Ironically of the ten bookies reviewed:

  • THREE shortened the price of the Coalition
  • TWO shortened the prices of the ALP
  • FIVE did not make any adjustment

See the table below:

It will be interesting to see what the polls (and then the bookies) make of it in the coming days.