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.