Bookies’ Corner: Brexit – Will we stay or will we go?

This, the second in SBC’s new Bookies’ Corner series, sees the experts from the world of betting hash out the EU Referendum and whether there’ll be a Brexit. 

It has been speculated that Brexit may become the biggest political betting event in history. Political betting has been gaining popularity in recent times with the Scottish Referendum breaking records, and this looks set to continue with both the EU Referendum and the US Primaries, not to mention the US Election, taking place this year.

Weighing in on this debate are Graham Sharpe Media Relations Director at William Hill, Oddschecker’s Head of Digital Marketing Ryan Murton, Matthew Shaddick Head of Political Betting at Ladbrokes, Sporting Index’s Michael Garforth and Naomi Totten PR Manager at Betfair.

SBC: It’s been estimated that the EU Referendum will be the biggest political betting event in history. Is this a case of political betting becoming increasingly popular these days or is it more the nature of the event? 

Matthew Shaddick, Ladbrokes: I’m not entirely sure it will beat either the Scottish Independence Referendum or last year’s general election, but it might get close. I think it will largely depend on how close the contest looks running into the last few weeks.

Political betting as a product is expanding rapidly and what with the Referendum, the London Mayoral race, Scottish and Welsh elections and US Presidentials, there is absolutely no doubt that this will be the biggest year ever.

For a political event to catch the attention of the general betting public, it helps if it’s as straightforward a proposition as possible, which is why a binary referendum works perfectly. The fact that so many people feel so strongly about the outcome also helps, although I don’t think it’s quite at the level of the 2014 Scottish vote. Interestingly, we are seeing a majority of bets so far being placed on Leave, although the balance of money staked is clearly in Remain’s favour. That mirrors Scotland, in that Yes was always the leader in terms of bets, but more cash was going on No. I think it may be something to do with the fact that the more passionate and committed voters are on the Leave (and in Scotland, Yes) sides.

Michael Garforth, Sporting Index: I think it’s fair to say that political betting is becoming more popular. Whilst we have been offering politics markets for over two decades, the levels of interest and business continues to rise each year. Also betting, and in particular political betting, has become more respected, especially in the aftermath of recent polling disasters in the UK and Israel. Political commentators now quote our midpoints to forecast turnout, party seats and next president with more conviction than the latest opinion polls.  Add in the extra dynamic, the effect that leaving the European Union would have on the city and the pound – we will start to see a glimpse of this if the polls do tighten closer to the date.

I expect the EU Referendum to smash previous sums placed on political events by some distance as the ramifications of a ‘brexit’ mean it will attract a wider range of clients from punters to city traders alike.

The nature of the event certainly helps although I initially struggled believing this could be as big a political event as the Scottish Referendum. The EU telling a fisherman from Grimsby how many tonnes of cod he can catch doesn’t quite stir the same emotions as sending King Edward’s army home after the battle of Bannockburn. However, the timing is key here and we are now going into the EU Referendum with the European Union facing its biggest crisis yet and its very existence is in doubt. The unelected EU politburo and Frau Merkel show no signs or willingness to solve this crisis by the 23rd of June, as concerns grow and fear mongering on both sides spreads, polls will tighten, the EU will continue to dominate the news and just like voters, punters will begin to pick a side.

SBC: With over three months to go, there’ll be extensive debate with particularly vocal support on the patriotic ‘Leave’ front with Boris certain to draw media attention. How much are you expecting such campaigning to affect the final result? 

Ryan Murton, Oddschecker: Ever since Boris Johnson came out for ‘Brexit’, the shift in odds has been negative for the Leave campaign. The best price you can now get on ‘Stay’ is 4/11 with ‘Leave’ at 5/2.

The media are reporting that it’s the ‘Leave’ campaign that has all the momentum but the most recent odds and polls suggest that support for ‘Remain’ is actually rising.

IDS, Gove and Boris are the most high profile campaigners for ‘Leave’, with Priti Patel on the side-lines and it’s fair to say they haven’t had that much media coverage yet. The coverage has been the play of Project ‘Fear’ by the ‘In’ campaign and on the opposite side, the ‘Leave’ campaign have simply been given coverage, of them moaning about how the ‘In’ campaign are using scare tactics.

You could expect the odds to begin shifting once the televised debates start, as there will be plays on the Single Market, Eurozone and Immigration.

The ‘Leave’ campaign aren’t giving much substance as of yet. They’re simply saying “we should leave and we’ll be better off”, without actually saying why we’ll be better off.

You should expect the plays of Immigration to have a big impact once the next few months get going, given the situation with the handling by the European Union so far.

SBC: Why have bookmakers found it tough going calling political markets in recent times? Moreover, why are the bookies’ odds not reflecting the opinion polls in this instance, what are the indicators? 

Naomi Totten, Betfair: We can’t speak for all bookmakers but we’re fortunate at Betfair to have the Exchange market, which has proven to be an accurate predictor of political outcomes for many years.

The Exchange has called more than 20 political outcomes correctly in recent times, calling a “No” vote for the 2014 Scottish Referendum as an 80% chance throughout the campaign, while the polls were calling it 50/50.

And while the Exchange layers, like every other political observer, didn’t see an overall Tory majority coming in last year’s General Election, the market did predict the Conservatives would have most seats. The Brexit market is currently firmly indicating that the vote to remain in the EU will prevail so we’ll be watching that with interest.

Opinion polls are, by their very nature, swayed by opinion but Exchange markets are driven purely by bettors – who are putting their money on the line.

To take a current example, this is particularly relevant for the Presidential election as wagers are not accepted from the US, so the markets represent a worldview of US politics.

SBC: Boris Johnson was heavily odds on to back in ‘In’ vote, what was this based on and was there much betting activity on the Mayor to turn his back against Cameron? Moreover how does it affect his leadership bid going forward? 

Graham Sharpe, William Hill: Boris Johnson is always newsworthy and when the news he is creating has a potential betting context I always take a particular interest. Some years ago Boris wrote a column in a high profile political magazine, in which he declared that the country would never join the Euro and quoted the odds he personally thought he’d be prepared to offer against that happening.

I wrote to him, accusing himself of setting himself up as an illegal bookie and offering to take the odds he’d quoted. I got a letter back accepting the bet which, sadly, he has now won!

However, I have won back what I lost through that bet many times over by backing Boris to win the two Mayoral elections in which he triumphed, on both occasions being readily available to back at odds against.

Boris’s decision over which side of the EU Referendum debate to support was always going to be pivotal to how close the actual vote might turn out to be. But, given that he was almost certain to unveil his reasons in his own regular newspaper column which would be seen by many people prior to appearing online or in print, I was never keen to see us taking bets of any significant size about which way he would jump. In the event we came to no financial harm as a result on Boris backing Brexit.

Immediately his decision was announced we cut his odds to be the next Tory leader to joint favouritism with the previous clear market leader, George Osborne – and it was not long before Boris became the clear favourite.

If it were down to Tory Party members or voters there is little doubt Boris would prevail by a landslide and almost certainly be a shoo-in to be the next Tory leader and Prime Minister.

But whether he has such overwhelming support from his fellow MPs is another matter and that could be the biggest problem for him to overcome, particularly if he loses out in the Referendum.

Boris as the next Tory Leader and Prime Minister is a potential financial headache for us – but Justin Tomlinson, the 39 year old Swindon North Tory MP would be a positive migraine for us if he were to come through on the rails to get the job – having backed himself with me years ago, in 1998, to the tune of £50 at 10,000/1 to do so when he was a mere university student, thus giving himself a potential £500,000 windfall should he ever get the top job in  British politics…come on Boris!