The EU referendum is only weeks away and while the pollsters aren’t offering much certainty about the result, on the betting markets it’s a different story. Bookies have seen a very substantial swing toward Remain over the last few days. The odds on the UK staying in Europe have collapsed from 1/3 last week to 1/5 today. This shows that the chances of Brexit are now at a new low of just 21 per cent compared to the giddy heights of 40 per cent at the end of 2015.
On balance, the polls have probably been better for Remain recently, but there’s still a lot of variance, with some surveys still showing Leave ahead. However, the betting public can only see one result: with more than nine pounds out of every ten wagered at Ladbrokes over the last month being staked on a Remain victory.
Ever since Barack Obama touched down in the UK last month and waded into the debate, the bookies have seen a wave of cash for Remain, despite polls appearing to suggest the President’s intervention had had a limited effect.
So, given the importance of the EU referendum, will this be the most wagered on a political event of all time? The amount of money bet so far hasn’t matched the record breaking sums banked on the outcome of the 2014 Scottish independence referendum although recent days’ trading at Ladbrokes suggests it won’t be far behind.
History tells us that most of the bets placed will be in the last couple of weeks before polling day and maybe we’ll see some more committed Leave supporters force their odds down in the closing stages. Either way, we are certainly going to see tens of millions of pounds staked across the UK betting industry by 23 June.
But should we listen to the bookies? And how well have betting markets done in predicting other recent election results? Not badly is the answer, and arguably quite a bit better than some other methods of forecasting. The odds got the 2014 Scottish Referendum right, with No being a clear favourite even as polls seemed to be moving towards Yes at the end.
The betting wasn’t much better than anything else at picking up the Tory majority at the General Election last year, though. But it did a pretty good job of forecasting that the Conservatives would be the largest party. The polls were more or less static for the entire campaign, but the betting moved strongly in favour of the Tories the closer we got to polling day.
On the Referendum, I’ve gone for a bet on Remain winning with between 55 per cent and 60 per cent of the vote, but if the odds for Leave get any bigger that might become the value bet.
Matthew Shaddick is head of political odds at Ladbrokes