Total Politics 2010 Election Map

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Bet You it Beats the Polls

 

Mike Smithson

 

 

A common characteristic of those involved in the political process is the desire to make forecasts about the results of future events, particularly elections. You hear it all the time -‘she's not got a chance of becoming the PPC’, ‘if he goes on like this he'll get thrown out next time’, ‘the Lib Dems will be slaughtered unless they change their leader’ and so on.

 

Often these disputes develop into the inevitable ‘I bet she will’ or ‘I bet you they won't’ and occasionally these can become private wagers. At a number of London's gentlemens clubs in the 19th century (betting on things like this is predominantly something that men do) they used to keep ‘betting books’ where these were recorded in a formal manner.

 

Within parliament too there has always been a strong desire to bet. The late Ian Mikardo MP, a former chairman of the parliamentary Labour party, became legendary for operating what was effectively a personal political book-making business for colleagues in all parties.

 

The liberalisation of betting laws in the 1960s saw the creation of vast bookmaking chains and now with on-line gambling the opportunity is there for anybody to bet on politics. Anyone with a credit card is able to bet 24/7 on an array of political results ranging from David Cameron's first subject at PMQ’S to the number of sips of water the Chancellor will take during his budget speech.

 

The real money is on the outcome of elections. The collective thinking of those prepared to back up their opinions with hard cash, as evidenced in the betting odds, may be a better guide to the way things are heading than polls. This certainly was true during the run-up to the London Mayoral election. Surveys showed completely different forecasts on the outcome from different organisations. Despite some polls putting Ken ahead, Boris Johnson remained a solid odds-on favourite. Those risking their own money got this one right.

 

May's local and London Mayoral elections led to a development on the Commons seats  betting markets I’d never seen after more than a decade and a half of gambling on them – people were prepared to risk serious money on the Conservatives winning the next general election with an overall majority.

So in spite of polls in previous years suggesting ample Conservative majorities it took real voters casting real ballots in real elections to finally convince gamblers that change was on the agenda. There is not often betting on local elections but the results can and often do affect the national markets.

 

Commons seat spread betting is an interesting indicator of opinion and has only been around for about 15 years. This involves making predictions on the number of seats for each main party at the next election and then watching them being traded like stocks and shares. The more correct predictions the more you win and vice-versa. So if you had bought the Conservatives at the 260 level offered during the peak of Gordon Brown's honeymoon and they end up with 360 seats you would make one hundreds times your stake level. Alas remember the reverse is true!

 

The regular prices that are featured on some websites are good indicators of betting opinion. In 1997 and 2001 the markets overestimated the Conservatives. In 2005 they overstated Labour’s results.

 

One final word. Successful gamblers follow the political process and polling very closely and are acutely aware of the dangers of falling into the trap of betting in line with what they want to happen. My biggest losses have occurred when betting on my own party which I now try to avoid. It is much easier to make rational decisions when you are not emotionally involved.

 

Mike Smithson is the founder and editor of Politicalbetting.com