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Betfair Masterclass Series Part 2: Tips and Strategies to Bet on Politics

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This article first appeared at betting.betfair.com on May 27th 2020

Don’t re-fight the previous election

In the previous political betting masterclass, I focused on election betting and mentioned how each particular race is unique. Assuming the dynamics will transfer to the next contest is usually bad strategy – politics changes quickly. The same argument can certainly apply to another popular type of market – leadership contests.

Consider some recent examples. When Jeremy Corbyn announced his resignation as Labour leader, Rebecca Long Bailey was swiftly gambled into odds-on. Why? Because a narrative had grown, simplistically categorising their half-a-million members into rigid factions. Having backed Corbyn twice by big margins, they would back another ‘hard left’ candidate.

As it turned out, RLB never got close and the centrist Keir Starmer won by a landslide. The choices made in previous leadership contests involving different candidates, amidst different conditions, didn’t prove a good guide. Many of the voters weren’t even the same people, given how party members come and go.

There are plenty more famous examples. When Donald Trump and Ted Cruz were leading the Republican primary in 2015/16, the market initially preferred candidates more favourable to the mainstream such as Jeb Bush or Marco Rubio – based on previous contests. In reality, the party had changed in the four years since it picked Mitt Romney – in tone, policy and members.

Beware early leadership polls

The history of leadership contests is littered with bad early favourites. Particularly the Conservative Party, although Boris Johnson broke the mould last year. The recent Democrat primary involved favouritism switching between four candidates before Joe Biden finally won.

A classic mistake is to overstate the importance of early polls. When members or supporters are first asked, name recognition will be uneven. They will be unable to form a considered opinion about several candidates. The dynamics of the race will not yet be clear. Laying the early favourite generally proves a good tactic.

Know the party electorate

A common mistake made in leadership contests is to assume that party members will be in tune with wider public opinion. That is why Corbyn, for example, was the 24-1 outsider of four when I tipped him on these pages back in 2015. For at least a month, the media ridiculed his candidacy, primarily on the grounds that he would prove unelectable with the wider public.

The point they missed was that Labour members (as with all political parties) are, by definition, unrepresentative. Less than 2% of the population are party members and most are nowhere near as engaged or partisan. The key to identifying Corbyn was understanding the mood of the members.

The same could be said of the last Conservative contest, when MPs who voted to Remain in 2016 were at an irreversible disadvantage compared to Leave backers – because the party members were very pro-Brexit.

Indeed this is a recurring lesson with both parties. In Kenneth Clarke, the Conservatives had twice previously rejected a well-known candidate, with wide popular appeal, on the basis of his pro-European stance, in favour of virtually unknown alternatives William Hague and Iain Duncan Smith. Labour picked Ed Miliband over brother David – generally regarded to be more electable – due to their policy differences, not electability.

Know the electoral system and its dynamics

Likewise, this is essential knowledge. The Conservatives operate a multi-round system. First MPs whittle contenders down to two, by eliminating one per round. Then the top-two go forward to members.

This can mean – as with that IDS victory in 2001 – that the candidate best placed to win with the members never gets the chance. On that occasion, Michael Portillo was thwarted by tactical voting among MPs. Tory leadership contests are famous for such shenanigans.

Labour, alternatively, use the Alternative Vote. Here members get to rank the candidates in order of preference. The effect can favour the least offensive candidate – who hasn’t alienated any particular faction. That is how Ed Miliband won.

In US primaries, the voting system involves elections in each state, lasting several months. Therefore, one must constantly think ahead and weigh up the dynamics of each particular electorate.

Buy the rumour, sell the fact

Successful trading in any market involves successfully predicting the trajectory of the odds. In politics, that means staying ahead of the news cycle and looking to predict the future.

This is key to playing side markets such as leader exit dates or when the next election will be held. For example last year there were good profits to be made from predicting how the complicated Brexit process would play out. It was possible to think ahead and work out that a general election would be needed and that Theresa May would be removed as Tory leader before it took place.

Likewise, this is how I prefer to play leadership contests. Whilst they can appear wide open, including dozens of listed candidates, they are not. Usually, only a small number of candidates are realistically well-positioned.

Click here to read the full article, free of charge, at betting,betfair.com

Betfair Masterclass Series: How to Predict Elections

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This piece first appeared at betting.betfair.com on 26th May 2020

Arguably no set of markets have grown more in the past decade than those related to politics. From being a niche pastime, that spiked infrequently whenever there was a big election leadership contest, political betting has become an almost daily conversation and the biggest elections are huge, worldwide events.

In 2016, politics actually produced the two biggest markets ever on Betfair – the Brexit referendum and the US Election that saw Donald Trump elected. At this stage of Trump’s re-election bid, the trading volume on Betfair is running at triple the rate on that previous record-breaking total.

We can place political betting opportunities into three categories. 1) Elections – whether national or local. 2) Party leadership contests. 3) Ongoing, newsworthy events – Britain’s three-and-a-half year Brexit process provides an obvious example. In this piece, I will focus on elections.

There is no reliable formbook to apply across elections

Smart betting involves identifying consistently reliable indicators – a formbook. Ideally, there are systems that can be applied across events. Whereas that is generally possible with sports betting, it is highly questionable whether any such consistency can be found in politics.

The best way to win on elections is good old-fashioned hard work and research in order to understand the particular dynamics of each race. Each election is unique – whether that be the parties/candidates and/or their brand at that precise moment, key issues or differential motivation of particular groups of voters.

Golden rules keep on falling

Indeed, recent political history has several historic betting upsets, with various ‘golden rules’ debunked in the process.

First and foremost, until 2016, the argument that betting markets were the best predictor of results – more so than polls – held sway. From Betfair’s inception in 2001 until that year, the main market favourite 100 days out for every US or UK election went on to win. Then Leave won the referendum and Trump defeated Clinton – both massively against the tide of money.

Second, there was a logical theory that elections would generally see a late swing towards the status quo, as voters took a closer look at the opposition and weighed up the risks involved in change. That provided a strong argument for backing Remain in the referendum.

More generally, opposition parties tended to fall back during election campaigns. Then came Jeremy Corbyn. In the space of six weeks, his Labour Party turned the polls and 2017 election on their head. Their rise from around 25% to 40% is unprecedented and completely blindsided various betting markets.

The third ‘golden rule’ to fall came this year. An extremely reliable tactic in past primaries for a US election was to follow results in the first two primaries. Without winning Iowa or New Hampshire, candidates would rapidly lose momentum and donors. Victory in one of those two primaries was regarded as an imperative.

This year, Joe Biden flopped abysmally in both. He then failed to win the third primary in Nevada. Yet he (predictably according to the betting) bounced back in South Carolina and, within a few days of winning that fourth race, Biden had all but secured the nomination.

Is it now best to back election outsiders?

This question pops up frequently. Outsider backers feel empowered by those upsets. Experts have never been held in lower regard and ended up with egg on their faces in 2016 and 2017. There have also been big turnarounds in French and Australian elections.

Click here to read the full article, free of charge, for betting.betfair.com

Six famous leadership contest upsets

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This piece first appeared at betting.betfair.com on 1st April 2020

For weeks, the markets for Next Labour Leader and Next Deputy Labour Leader have been stagnant. It is assumed that Keir Starmer and Angela Rayner will win, as respective odds of [1.02] and [1.01] illustrate. I’ve no reason to expect an upset but were the market to be proved wrong, it would not be the first time by any means.

2001: IDS stuns his more famous rivals

The first big leadership contest after Betfair was invented produced a remarkable betting heat that remains fresh in the memory. Michael Portillo – then Shadow Chancellor and long tipped as a future Conservative Party leader – started a strong odds-on favourite. His principal opponent was assumed to be another Tory ‘Big Beast‘ – former Chancellor Ken Clarke.

Both had big press endorsements and a vast name recognition advantage over their three opponents. Despite securing plenty of endorsements from Eurosceptic MPs, punters and (critically) headline writers took little notice of Iain Duncan Smith – who had been rising up the party ranks in the Shadow Cabinet. Even as the field whittled to three, IDS remained a [30.0] chance.

Then in the final round of voting among MPs, amid rumours of tactical skullduggery, Portillo was eliminated. Now it was down to the party’s largely Eurosceptic members to choose. Clarke started a strong favourite around [1.4] but gradually the market wised up to the fact the grassroots preferred ideological purity to perceived electability. IDS would go on to win by a whopping 61-39 margin.

2007: Harman edges Johnson in photo finish

Given how late we are into the current race, Labour’s 2007 deputy contest probably offers the best hope for those cheering an upset. On the day the result was announced, Alan Johnson was a [1.1] chance to succeed John Prescott. There was very little indication of the drama about to unfold.

Harman had started out as the outsider of six, trading around [16.0]. She only finished third in the opening round of the Alternative Vote process – Johnson led after rounds two, three and four. However, she overtook him at the death, winning by a minute 50.4 – 49.6% margin.

2008: McCain defies cash shortfall in GOP race

John McCain had been touted for at least a decade as a likely nominee for the Republicans. He lost to George W Bush in 2000 and started out as second favourite behind Rudy Giuliani when the party sought his successor in 2008.

It didn’t start well. Struggling to raise cash to compete with the likes of Giuliani and Mitt Romney, McCain sacked several advisors the previous autumn and was rumoured to be quitting. Fred Thompson also usurped him in the betting and the Arizona Senator drifted out to around [25.0].

The turning point came in Iowa. Although never expected to win this socially conservative state, McCain performed respectably in fourth, way better than Giuliani, while Romney’s defeat to Mike Huckabee damaged his credibility. One week later, McCain won New Hampshire and once the war hero had exorcised a ghost from his 2000 defeat in South Carolina, the result was never in doubt.

Click here to read the full article, free of charge, for betting.betfair.com

How Political Betting Went Global During the Trump Era

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The US Election is a huge betting market, lasting well over a year. With sports canceled amid the coronavirus, the 2020 Presidental Election may well be the biggest single betting event of the year.

To many Americans, November’s general election feels like one of the most critical moments in the history of the Republic. The idea of gambling on the result probably never crosses their minds and quite possibly disgusts them. 

That is because, for various historical reasons, betting on politics was banned and remains heavily restricted in the USA. It is growing fast, via sites such as PredictIt, but the main action still takes place in Europe.

To many European gamblers, Trump v Biden is on a par with Wilder v Fury. Entertainment. Just another event and opportunity to take a punt.

British bookies still lead the way

Britain is the home of political betting. The concept was practically invented here, soon after the creation of licensed betting shops in the 1950s.

Our bookmaking industry is the most sophisticated in the world, led by global players such as Betfair, Ladbrokes, and William Hill.

No sooner was Donald Trump elected in 2016 than bookies were offering odds on the 2020 race – both on the presidential race and party nominees.

However, political betting is not restricted to elections and leadership contests.

For over three years, British politics was totally consumed by Brexit, and bettors were playing every step of the process. – whether that be specific parliamentary votes, date of departure, or how it affected other political futures.

Politics can be traded like the stock market

Come the 20th century, with the advent of peer-to-peer betting exchanges, political betting became akin to trading the stock market.

One could make money from backing Trump early in 2016, then cashing out early for a profit – once he merely became favorite for the Republican nomination, for example. Or from short-selling a poor favorite such as Jeb Bush.

The main event turned out to be a classic, somewhat mirroring the vast stakes and extreme drama of the Brexit referendum that the UK had experienced several months earlier.

Click here to read the full article, free of charge, at safestbettingsites.com

South Carolina Primary: Biden poised to unite the anti-Sanders vote

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This piece was first published on Saturday 29th February 2020 at betting.betfair.com

This year is the third time that Joe Biden has run for the presidency. If the signals on Betfair for tonight’s South Carolina Primary are correct, he is about to finally win a race.

Biden expected to land big win in SC

The fourth primary towards the Democratic Nomination has been an extraordinary betting heat already. Biden was matched down to [1.15] early but ceded favouritism following heavy defeats in Iowa and New Hampshire. Yet after a transformative week, he’s back down to [1.1] – equivalent to a 90% chance.

The polls certainly point that way. The RealClearPolitics average lead is 12.5%, with five of the last nine showing Biden 15% or more ahead. I reckon the bigger margins are right, factoring in the momentum of recent days. Fivethirtyeight give him a 95% chance of victory.

Evidently, the former VP was boosted by his midweek debate performance. As explained beforehand, I backed him at [15.5] for the nomination in expectation of this endorsement from James Clyburn.

Tactical voting now liable to help Biden

Tuesday’s debate seems to have had a profound effect on the race which, within a few days, may become a dual. Every primary so far has involved tactical voting among moderates – for example Buttigieg was best-placed to thrive in IA and NH.

Now, however, neither Mayor Pete or Klobuchar seem viable. They will both be thrashed on Super Tuesday by Sanders and, at least in the Southern states with large black electorates, by Biden too. They will soon run out of money soon and endorse Biden.

Critically, Michael Bloomberg may have peaked. His second debate was better than his first, but still pretty grim. He isn’t a natural Democrat and it shows.

Reportedly, Bloomberg hasn’t committed to a massive ad-spend after Super Tuesday. Again, expect him to back Biden.

Click here to read the full article, free of charge, for betting.betfair.com

SC debate could be the last chance to stop Bernie Sanders

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Ahead of the busiest, and invariably decisive spell of primary season, the importance of Tuesday’s Democrat debate from South Carolina cannot be overstated. Following his resounding, poll-beating victory in Nevada, Bernie Sanders is even money favourite to win the nomination.

This won’t be the final debate but may very well be the last chance for his rivals to stop him. Expect the gloves to come off. The fact such generous odds are available may reflect the fact punters anticipate a bloodbath.

The last two debates have proved these high-exposure, set-piece events can have a significant impact. After New Hampshire, debate winner Amy Klobuchar stormed past polling expectations into third place. A poor follow-up in Vegas then stopped the ‘Klobucharge’ in its tracks. On the same stage, a concerted take down of Michael Bloomberg may have killed the billionaire’s hopes.

Attacks on Sanders bound to take centre stage

Whilst his rivals will doubtless repeatedly accuse Bloomberg of trying to buy the presidency, there will be less focus on him. The billionaire’s debut meant Sanders was able to escape the worst headlines after Vegas. Criticism of his spending plans and associated risk to the Democrat ticket failed to cut through. Those attacks will be relentless tonight.

In an interesting development, Bloomberg is throwing the kitchen sink at Sanders. Whether it helps him is questionable, but these negative ads do have the potential to hurt the front-runner.

The independent socialist Senator escaped deep scrutiny of his positions, and his past, in 2016. Many Democrats understandably fear the damage, once Republicans bombard voters with footage of him praising Fidel Castro, the Sandanistas and even the Soviet Union. Or stuff like this, bound to alienate large swathes of natural Democrat voters.

.@jaketapper reports on an essay Bernie Sanders wrote as a 30-year-old about the fantasy gang rape of a woman. pic.twitter.com/Sze6DzBjmt— Andy Ngo (@MrAndyNgo) February 25, 2020

Bloomberg, for his part, will doubtless go after Sanders’ record on guns, while emphasising his own progressive credentials on gun control. See these tweets from his chief surrogate.

No candidate has a stronger gun safety record than Bloomberg:

Reduced gun deaths in NYC by 48%
Co-founded Everytown for Gun Safety – the most powerful grassroots force for gun safety
Spent $110M to elect gun sense candidates to Congress in 2018https://t.co/iPg2CDl3kA— Tim O’Brien (@TimOBrien) February 24, 2020

Whilst I doubt this will make Bloomberg any more electable to a left-wing audience, I do believe he can hurt Sanders badly in forthcoming races. African American voters make up a very large chunk of the Democrat primary audience in Southern states. Although polling competitively, his share is in the low twenties and vulnerable to any candidate who can unite the black vote.

Nevada Caucuses Betting Tips: Sanders set to open up big lead as Bloomberg bombs

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This piece first appeared at betting.betfair.com on Friday February 21st

It’s often said that TV debates can’t move the needle anymore and that has largely been the case during several months of the Democrat primaries. Michael Bloomberg’s debut in Nevada, however, just wrecked that theory, at least if impacting betting markets is the criteria.

Bloomberg in freefall after debate disaster

The former NY Mayor had been all the rage on Betfair. Going into Wednesday night’s debate, he was trading at 3.5 for the Democrat Nomination, 6.4 (15%) to be Next President. Less than 48 hours later, those respective odds are 5.5 (18%) and 10.5 (10%).

Make no mistake, Bloomberg bombed. He was always going to be attacked for trying to buy the presidency by all his rivals. It was inevitable that his record as mayor, regarding racially biased policing, plus a history of sexual harassment and gender discrimination lawsuits, would be scrutinised. Not only did he seem unprepared for the barrage, he came across as unaware that this stuff might even be controversial among a Democrat audience.

Indeed, the impression I took away was that – for all the ads, memes, unrivalled spending – Bloomberg will crash and the whole episode remembered as an amusing vanity project. I seriously doubt many so-called ‘establishment’ Dems came away thinking he was the answer. It would be no surprise to see him flop on Super Tuesday, before rapidly reducing his ad campaign.

Warren attacks steal the show

His presence and performance, alternatively, offered a very timely boost to the others, who must have feared being blown away by the spending. They took turns to go after Bloomberg, with Joe Biden notably seizing an early opportunity to sound relevant again.

It was Elizabeth Warren, however, that stole the show and post-debate headlines, tearing Bloomberg down on more than one occasion. Her odds have shortened to [40.0] for the nomination, [90.0] for the presidency since and, in that mood, shouldn’t be written off. She has arguably the biggest growth potential of any candidate, because she appeals across the party. After this scalp, It is tempting to see her as the best Democrat to take Trump on head-to-head too.

The next race is Saturday’s Nevada Caucus, for which Bloomberg isn’t even on the ballot. Bernie Sanders starts an overwhelming favourite at 1.14. Now clear front-runner in the nomination betting at [2.04], Sanders is boosted by the latest polls showing him between 13% and 19% ahead in Nevada.

Note that, thanks to record early voting, a large percentage of these ballots have already been cast. Roughly one third of likely Democrat voters here are Hispanic and probably a higher percentage among the extra voters since 2016. On the basis of wider polls among Hispanic voters, I expect this extra turnout benefits Sanders

If that turns out to be the case, it will be a strong narrative to take forward. His movement and ground game inspiring new voters to the polls. With a big win, ahead of large delegate gains on Super Tuesday, Sanders could soon have the look of a presumptive nominee.

On the other hand, the dynamics seen in IA and NH could play out again. Namely, a late transfer of votes among the moderates, while the marmite Sanders stalls in the twenties. His healthcare plans are deeply controversial among the Culinary Workers Union – a key segment of this electorate.

Click here to read the full article for betting.betfair.com

Brexit Latest – Election odds-on to occur before Brexit

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This piece was first published on 29th August 2019 for betting.betfair.com

Having spent all summer on tenterhooks, waiting to learn precisely how Boris Johnson’s government plans to deliver its Brexit promises, British politics finally blew up yesterday and entered a new, highly unpredictable phase.

Prorogation exacerbates political divide

Johnson’s decision to prorogue parliament for five weeks starting in mid-September is the most dramatic development since Article 50 was extended in March. Some would say in modern parliamentary history.

It was hailed by Brexiters as an entirely legitimate masterstroke, that wrongfooted scheming Remainers. Among opponents, talk of coups, dictatorships and the end of democracy were commonplace. Sizeable protests sprung up in various cities.

Markets remain unclear of outcome

The process is, consequently, a little clearer but after 24 hours to digest the news, there is no signal whatsoever from betting markets that confidently predicts the outcome.

Granted, the odds about Brexit on 31/10/19 or No Deal During 2019 were matched at new lows – 1.79 and 2.2 respectively – but neither price represents clear favouritism and both have fallen back a little since.

Click here to read the full article for betting.betfair.com

Interview for Business of Betting Podcast

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This was a most enjoyable interview from earlier this year, with Jake Williams for his Business of Betting podcast. We discuss my route into political betting and becoming a professional gambler. Of particular relevance is our conversation regarding the 2020 election and how many extra variables we have to deal with nowadays, such as fake news.

Here’s the full 35 minute interview.

European Elections: Back Change UK for a wipeout

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This piece was first published on Monday 13th May – unfortunately these luxury odds on Change UK and Lib Dems performance are no longer available.

Three months ago, they were the biggest story in Westminster. A group of high-profile defectors from Labour and the Conservatives, standing for moderation, centrism and cross-party collaboration in an era of unprecedented division. Finally Change UK, or the party formerly known as The Independent Group or TIG, will face their first electoral test at the Euros.

Expectations are falling fast and accordingly, the betting odds with the best political betting sites aren’t exactly positive either. On the morning that seven Labour MPs defected, parallels were widely drawn with the 1980s and the SDP – a breakaway of four Labour defectors which soon morphed into an alliance with the Liberals, specialising in by-election upsets and regularly polling beyond 20%.

Such hype now seems laughably optimistic and from 2/1 on Friday, Ladbrokes have cut the odds on them earning 5% to 11/10 and offer Evens they win no seats at all.

Poor strategy destroyed early optimism

There are numerous reasons for their failure to date, much of which is self-inflicted. They only recently decided on a name and even that simple process was problematic. They failed to register in time for the local elections – the perfect setting for any new or protest party. They haven’t even got a candidate for next month’s Peterborough By-Election.

Any small party faces an uphill struggle being noticed or heard. Support from celebrities outside politics could have achieved that and there were early rumours of J.K. Rowling taking a role.

Nothing materialised so instead, they CUK became merely synonymous with Remainer rebels whose support for Labour or the Tories was no longer tenable. The fact none called a by-election – which any of them would struggle to win – handed opponents an easy target.

So does a lack of policies beyond Brexit. It has become easy for opponents as self-important opportunists, obsessed with Brexit and offering no answers to wider problems. The Left called them Tory-lite while the Right dismissed them as anti-democratic ‘Remoaners’. The likes of Chuka Umunna and Anna Soubry became hate figures to many Labour and Tory voters.

Click here to read the full article for gambling.com