The old cliche holds that a week is a long time in politics. In political betting a day or two can seem like an eternity.
The last time I wrote one of these columns, the market on the outcome of the election had flipped, with a hung parliament getting its nose in front and moving into a shade of odds on. Now that's changed dramatically – and not in a good way for opponents of Boris Johnson. A Tory majority is now trading at as low as 1-2, an implied probability of about 66 per cent.
So did progressive commentators trying to find crumbs of comfort by suggesting that Nigel Farage’s decision to run away from Tory held seats might ultimately help Jeremy Corbyn get it wrong? Only up to a point. The betting move in favour of the Tories actually got under way during a weekend in which the media focussed on Labour’s spending plans.
It bears repeating that the party hasn’t actually published its manifesto yet. But the bad press that it has been getting has had an impact with punters. It was underlined by Farage bottling it; the phrase “busted flush” does rather spring to mind for him.
The betting on who will get the most seats was about as interesting as spending Friday night with the ironing even before the developments of the last few days. With the Tories now as short as 1-20 to be the biggest party in Parliament, that market looks dead unless you're minded to to stump up thousands of pounds for a small percentage return (a dangerous game to get into, given what happened to some of those who backed Hilary Clinton at 1-10 during the last US presidential election). As things stands Jeremy Corbyn needs an earthquake to inject some life into it.
There much love for Labour among the punters anywhere, with the possible exception of paid up party members who must have the Everly Brothers (dream dream dream…) permanently streaming. True, he had a bigger mountain to climb against Theresa May. But that’s not stopping the song from playing.
An interesting wrinkle here: William Hill has changed how it sets its prices, incorporating an algorithm that factors in number of bets as well as weight of money. This is to reflect the fact that small punters were notably better at predicting the outcome when it came to the Brexit referendum and the aforementioned US poll. This is something to watch closer to polling day, when mainstream punters start joining in with the specialists and political junkies who are currently making the running.
The latter have also been the dominant force in spread betting markets, which saw an immediate plunge on the Tories when Farage announced his decision. Sporting Index’s political trader Phil Fairclough describes this as a something of an over reaction: “The frenzy of (Tory seat) buyers was almost counter-intuitive given that Brexit Party had essentially chosen to keep things as they were.”
But the money’s still coming: “We are extremely conscious of the fact that Mr Farage could decide to not field candidates in any of the three-way marginals either. Given this, our current quote of 341-347 could see an increase to over 360 should the Brexit Party not field any candidates.” Thursday, when the statement of persons nominated is published, will be an important day.
Is there any comfort for the Tories’ opponents? Only that the betting markets can and do get it wrong. And right now, during the early exchanges, they don’t always make sense. Paddy Power’s Lee Price, for example, tells me the most popular bet in the “government after the next election” has been a Conservative/Brexit Party coalition. Farage’s party would actually have to win a seat for this to happen. It’s odds on (4-7) that they won’t do that and given they’ve pulled out of more than 300, that's a short priced bet that it might actually be worth taking an interest in.
Another intriguing stat from Price concerns the number of bets across all markets. Some 40 per cent are for the Tories, understandably, but 30 per cent are for the Liberal Democrats. A Labour/Lib Dem alliance would seem to be popular with Power’s punters even though it won’t happen with Corbyn as leader. That’s not least because the Lib Dems’ Jo Swinson doesn’t want to scare off potential supporters in the home counties who see the Labour leader as the living embodiment of the monster under the bed that scared them as children.
This has possibly been caused by political punters hunting out value. But they could also be indulging in wish fulfilment. The spread betting markets certainly don’t speak well of Lib Dem chances with the mid point of the spread at the time of writing sitting at 38 seats, down from 47.
What the substantial movement over the past few days does rather show is just how volatile this election is shaping up to me. The markets could say something very different this time next week, or even this time tomorrow.