The EU referendum: An attempt to analyse the in-play betting

June 27th, 2016


Michael Dent the creator of PoliticsOdds.bet, a site which tracks and graphs betting prices on political events, looks at the EU Referendum in-play betting

At 11:36pm on June 23rd, just before the first result was declared, the market was just short of 90% confident of a Remain vote. So much for markets knowing best – the market was wrong, and staggeringly confident in its wrongness.

So how did we get from there to settling the market for Leave? What follows is an attempt to analyse five hours of in-play betting. Of course, it is highly speculative, and it’s easy to create a narrative with perfect hindsight, so comments are welcome!


When early results indicate a possible surprise event, the market is stubbornly slow to adjust. We saw it in the general election last year, when even after the shock exit poll it was possible to get excellent odds on a Conservative majority. And we saw it again here.

As results rolled in, suggesting that at the very least it was much closer than previously assumed, you could almost hear the excuses – that these must be freak results, that they did not represent a trend. But a trend of Leave over-performance against the parity model was indeed emerging, particularly by Swindon’s declaration. As a result, there was value to be had on the Leave price.

I think a bold gambler starting the night with a neutral position would have built a position on Leave here. Bets placed during this phase could have yielded a 200-500% profit.

Animal spirits

At 1:56am, a period of almost an hour of relative stability in the betting market turned to severe volatility for the next 90 minutes. The market moved fast and sharply. Within 45 minutes we had an astonishing three distinct crossover events.

During this period, I believe individual results moved the market far more than they should have done, magnified by animal spirits and confusion as gamblers were hypersensitive to any result that appeared likely to change the narrative.

Our smart gambler would have compared each result to her parity model at this point, and realising that the individual results did not signpost a significant change, would have stuck to her hypothesis, aiming to top up her position at the best prices. A more risk-averse gambler might well sit this period of volatility out and just watch the data, and no-one would blame him!


From 3:20am, the market began to accept a Leave outcome.

Our smart gambler had made her money by now and would have eased up on the betting. A risk-loving gambler (or one desperate to cover a loss) can still make some money here – even when the outcome looked pretty clear, profits of up to 30% were still available.

But the risk-reward pay-off was weakening fast at this point, and by the time available profits fell below 10%, any sensible gambler should have been of Leave, and perhaps building a small hedge position on Remain at >10 odds, to protect against a last minute black swan event (when the graph looks like this, anything might happen!)

A word on volumes

I was astonished by the in-play volumes. As PB reported, by 6am on polling day the EU referendum had become the first market on Betfair to surpass £50m in cumulative bets. But by the time the broadcasters called the result for Leave, the total matched on Betfair had more than doubled £113m.

So despite a four month campaign, 55% of all betting was matched in the final 24 hours. On three occasions during the in-play period covered here over £800,000 was matched in a two minute period. Most two minute periods saw at least £200,000 matched. Truly the biggest political betting event ever.


In the chaos of in-play betting on an event like this, a calm head allows a smart gambler to make money. Or to keep their shirt – for me personally, I started the night with a significant position on Remain at 1.55 average odds. By the end of the night, I was able to finish with a small profit. I was lucky.

I shouldn’t have been able to get away with that – I should have lost my shirt. But by keeping a calm head and following Mike & others, I was able to turn a potentially very bad night for me into an OK one.

Michael Dent

Thank you to everyone who followed the betting prices at politicalodds.bet. I apologise for the server crash on 20 June and the fairly slow service during some of the most exciting moments of 23/24 June. We’ll be working on improving capacity for future events. In the next six months we’ll be closely following the Conservative leadership contest and the US Presidential Election.


Those who say that the bookies got EURef wrong don’t understand betting

June 27th, 2016

Ladbrokes betting barometer 2239BST June 23rd

Punters aim to make money not to provide an alternative opinion indicator

As well as the cries that the polls got EURef wrong there’s been something of a backlash against the betting industry which more than at any previous election had sought to promote itself in the manner that Ladbrokes did in the graphic above.

    They are being attacked for “getting it wrong” – something you’d never hear after, say, the Grand National when, as this year, a 33/1 outsider took the crown. By the same argument you could say that the “bookies get it wrong” whenever the favourite doesn’t win which is very often.

A problem is that some bookmakers have not helped themselves here. The Ladbrokes “barometer” and similar concepts from other firms did give the impression that they tried to present themselves as an alternative way of looking at opinion.

People bet to try to make money and have the satisfaction of being proved right. They are not doing it to provide an opinion poll alternative.

For me political betting is all about finding what I regard as “value” propositions where the bets available on the spreads, exchanges or with traditional bookies are understating my assessment of what could happen. Thus throughout the referendum campaign I never rated REMAIN at higher than a 55% chance.

Whenever I quote betting odds all I am doing is reporting what’s happening on the markets. Stating what the latest prices on an electoral outcome is not me saying that these are a correct indicator. In fact my whole betting approach over the decades has been to find bets where I think the prices are wrong and to suggest that there is value.

It should be said that I didn’t put a penny on REMAIN throughout the campaign even when it had big leads in the polls. The very tight prices that were offered simply did not provide any value. The risk of LEAVE doing it was always greater and I was never tempted.

What I think we are seeing is a reaction against the PR exercises run by some of the bookies to highlight their prices by such devices as the Ladbrokes barometer above.

Mike Smithson


The fight to be next CON leader and PM: The race begins

June 27th, 2016


We’ve just got details of the Conservative leadership contest. The plan is to start it immediately and have Cameron’s successor in place on September 2nd.

The process will be the same as the one used in the 2001 and 2005 elections. MPs will hold a series of ballot until a final short-list of two is agreed which will then go to the party’s 150k members.

Nominations will close on Thursday then MPs will vote every Tuesday & Thursday until a shortlist of two is agreed. That will then go to the members’ postal ballot. So the first results will come a week tomorrow.

The fact that this is being truncated is said to help Johnson because it will leave less time for an ABB (Anybody But Boris) to emerge.

Mike Smithson


Corbyn’s hanging on but for how long?

June 27th, 2016


Cameron is going, Johnson has been in hiding and Labour faces civil war. So who will lead Britain?

June 27th, 2016

Dave Quit

The country has voted for change but the future is unclear. Leadership is needed writes Keiran Pedley

Last Thursday’s Brexit vote was truly an historic event in our country’s history. The consequences for British politics will take time to play out. Right now the country is tense. Since David Cameron’s resignation Friday morning there is a political vacuum at the heart of power and sense of uncertainty in the air. Only a fool would predict with any degree of certainty what happens next.

No turning back

However, it is probably best to conclude that we are indeed leaving the EU. That ‘out means out’. Some on the Remain side have sought to challenge the referendum result. David Lammy, MP for Tottenham, has suggested that parliament should overturn the result. A petition to rerun the referendum itself has cleared 3 million signatures and counting. Clearly for some accepting the result is proving difficult.

But they should accept it. EU leaders have and they are demanding a swift divorce. Almost 17.5 million voters backed leaving the EU last Thursday – a million plus more than backed Remain – at a turnout of 72% (eclipsing the 66% turnout at last year’s General Election).  Remainers may justifiably be angry at some of the tactics used by the Leave campaign. However, voters have clearly delivered a message that they want change and that mandate has to be respected. Suggestions that Leave voters represent the ‘lizard brain of Britain’ are patronising and unhelpful. The voters have made their feelings known. All efforts now should be focused on what comes next rather than rerunning last Thursday’s referendum. We have to move on.

Enter Johnson (or May)?

How successfully we do so will depend on who becomes the next Prime Minister and the deal they can deliver. The early signs are that Boris Johnson is favourite. Having led the Leave side to victory and seemingly won the backing of Michael Gove he will take some stopping. However, the former Mayor of London does face significant challenges. He now needs to come up with a coherent vision of what Brexit looks like that satisfies Leave voters and wins over Tory MPs. If he doesn’t, Theresa May could yet emerge as an alternative unifying ‘safe pair of hands’. He may even end up challenged from his Right. The odds are in Johnson’s favour but he does have serious questions to answer on free movement and the common market – questions we can only assume he has been carefully considering during his period of silence this weekend.

Labour in meltdown

Meanwhile the Labour Party faces its own existential crisis. One of the striking features of the Brexit vote was how vast swathes of so-called Labour heartlands ignored the party line and voted Leave. Staunch Labour areas in Wales, Yorkshire and the North-East overwhelmingly backed Brexit. This trend was aptly demonstrated in Ed Miliband’s Doncaster where 69% voted Leave. The truth though is that this trend was seen all across the country in Labour areas.

Some Labour MPs now fear that the party could face a post-Brexit wipe-out in these areas much like the party experienced in Scotland last May. This has led to a concerted effort to remove Jeremy Corbyn as leader over the weekend, with a series of coordinated resignations designed to force him to resign. The plan being to replace him with a unifying figure that can carry the party into the General Election that is assumed to be coming soon. Time will tell if this coup attempt is successful. The loyalty of Corbyn’s support among party members will surely be crucial – though Labour MPs may hope to take the decision out of their hands. Depending on what happens next, Labour could end up in government or facing oblivion and we cannot be sure which.

Who will lead Britain?

In the meantime, the country faces a worrying vacuum in political leadership. One can only hope that it is filled soon. Whoever leads the UK out of Europe faces a daunting to-do list. Voters have clearly voted for changes in immigration policy but what changes and can they be delivered without leaving the single market and the economic challenges that would bring? More importantly, how does the next Prime Minister keep the UK together when Scotland and Northern Ireland voted Remain and Wales and England voted Leave? Moreover, how can we bring those voting Remain and Leave together when they have such different visions of the country’s future? Can we avoid descending further and further into the bitter and divisive politics that were such an unpleasant hallmark of the referendum campaign?  These are tough questions without even considering the inevitable ‘unknown unknowns’ that governments so often face.

Perhaps these seemingly conflicting objectives are impossible to achieve. Choices will have to be made. In which case the next 2-3 years will be some of the most rancorous and turbulent in post war British political history. However, let’s close on a more optimistic note. This uncertainty won’t last forever and our country has faced major crises before and come through the other side. It is possible that the shock of last Thursday is bringing undue panic. That a recession can be avoided. We will do a deal with the EU. This country does have a future. It is possible that a unifying leader may yet emerge and lead the country through this difficult time. In short, Brexit doesn’t have to mean disaster.

Nevertheless, it would be foolish to ignore the scale of the challenge our country faces in the coming weeks, months and years – let’s hope that the current generation of political leaders is up to the task.

Keiran Pedley presents the Politicalbetting.com / Polling Matters show and tweets about politics at @keiranpedley


Richard Tyndall on the exit strategy

June 26th, 2016


Recent interventions into the Muslim world by Western powers post 9/11 have been characterised by one great failing. Whilst they have carefully planned and executed the military phase of the campaign, they have utterly failed to deal with the post conflict stage leaving behind failed states in Iraq, Afghanistan and Libya as a result.

The Brexit campaign is in danger of doing the same thing if they do not sort out, very quickly, what their next moves are to be in the removal of the UK from the EU. Some might reasonably argue that they have already left it too late and these plans should have been clear before they ever went to war. Part of this failing – if indeed it does exist – might be because the politicians running the campaign didn’t actually think they ever stood a chance of winning. As a result they were making hostages to fortune throughout the debate and now have to find some way to reconcile the many different promises they made.

As an aside I should point out that exactly the same problem would have existed post a Remain victory although the consequences would probably have taken slightly longer to reveal themselves.

The biggest hostage of course is the question of freedom of movement and the inextricably linked issue of access to the single market. Dan Hannan has come in for some criticism over the last 24 hours for advocating the European Free Trade Area (EFTA) solution that would see very little change in the principle of freedom of movement but would, if developed properly, probably see drops in EU migration because of the restrictions placed on benefits. It is a position he has maintained resolutely throughout the campaign and I suspect is one reason why he was not used by Leave in most of the main events, in spite of being one of their most effective speakers.

Clearly there are a number of barriers to be overcome to achieve such an outcome. Three are of particular importance.

1.      The electorate. Immigration formed the core of the Leave campaign and was almost certainly the reason they won. Opponents will rightly point out that there is no mandate for ignoring this issue and entering the UK into a post-EU settlement that does little or nothing to help control immigration. However, as I advocated before the vote, it is necessary for the new Government to legislate on behalf of all the electorate not just the 52% who voted for Brexit.

That means that already almost half of the population would probably be relieved with a  solution that maintained the single market and freedom of movement. But what of those who voted Leave?  We do have some indications of their views. A Yougov poll on 8th June showed that 42% of Leave supporters would prefer the EFTA/EEA route post-Brexit with 45% opposing. I would contend that this would indicate that overall there would be a clear majority of the country that would choose EFTA/EEA over complete separation from the Single Market.

2.      Parliament. Whatever deal is brought forward has to get through both houses of Parliament. We know that the members of both houses were strongly in favour of remaining in the EU and I find it hard to believe that they would block the alternative that would assuage many of the concerns that were held about Brexit.

Both of the above points make a series of assumptions that would need to be firmed up prior to actually attempting a deal. As a result I believe that it would be necessary for the new Conservative Leader to make the case for EFTA/EEA membership and then put it to the electorate in a General Election after first having invoked Article 50. Imposing such a deal without being clear what the view of the British public is would be unacceptable and I seriously doubt anyone has the stomach for any more UK wide referendums in the near future.

Finally I mentioned three potential barriers to such a deal. The third of course is EFTA itself which is why I hope someone from the Leave campaign is already in discussions with Kristinn Árnason, the current General Secretary to discuss the attitude of the four current EFTA members to the possible arrival of a fifth member in the near future.

Richard Tyndall


Might Balls be Labour’s answer at 100/1?

June 26th, 2016

Will one of Labour’s Big Beasts return and run?

As the extraordinary episode in Labour’s history that is Jeremy Corbyn’s leadership enters what looks like a chaotic death-throw, eyes and minds inevitably turn to what – and who – comes next.

Various names have been suggested: Watson, Benn, MacDonnell, Jarvis, Nandy and others. Some have ruled themselves out but with events so fluid, I’d be inclined not to take any such statement too categorically.

None of those names comes without serious shortcomings. Some are of the same wing of the party as Corbyn and even if more competent as a leader, will struggle to connect with the crucial swing voters. Others have the opposite problem and are viewed with at best deep suspicion by many of the members and supporters who propelled Corbyn to victory last year. Many are untried and untested. Others have been tried and have been found to be lightweight.

So in such circumstances, might Labour look to a King over the Water? The name of Ed Miliband was tipped by Alastair Meeks some months ago but what of an arguably even more improbable option, the other Ed: Ed Balls?

Critics might point to the apparently insuperable problem that he’s not an MP (and indeed, he appears to be enjoying life outside Westminster). All true. However, these are extraordinary times. That David Miliband – also a non-MP – is as short as 6/1 and no longer than 12/1 as next Labour leader tells you that. Those odds are, however, strongly to be avoided.

Why might Balls be different? Firstly, his odds at 100/1 are quite literally a different order of magnitude but in terms of merit, Balls landed blows on the coalition government. He was an effective opposition front bencher and after a year of the precise opposite, Labour might be a bit more inclined to someone with a track record there. Whether he still has the fire for that fight is one question that does admittedly need to be asked.

The hurdle of being outside Westminster? There is of course the Batley & Spen by-election coming up. Balls was MP just down the road in Morley & Outwood prior to the election and while he wasn’t a great constituency MP, he knows the area well enough. It’s not a rock-solidly safe Labour seat but that won’t matter for the by-election. The opportunity is there should he want it and be allowed it through the selection process. Were a ‘Draft Balls’ campaign to gather momentum, the process is there to enable his eligibility for nomination.

I grant that it’s not likely. There are any number of things that could trip the scenario up. However, if Balls were in parliament now, he would undoubtedly be being talked of in the first sentence as a potential replacement for Corbyn. And he wouldn’t be the first long shot to come in these last 18 months.

David Herdson


David Herdson says the post-Corbyn chapter opens

June 26th, 2016

For once, Labour might actually be doing a coup properly

Jeremy Corbyn has never been loved as leader by the Labour MPs. He didn’t have enough support to be nominated without the horribly misguided nominations of backers of other candidates, he’s neither looked nor acted like a leader once in place, and he’s never sought to reconcile the gap between his personal mandate in the party and his lack of one in parliament. Those shortcomings will now be fatal.

Corbyn had no choice but to sack Benn, though in all probability he only pre-empted Benn’s departure from the Shadow Cabinet by a matter of hours: the Shadow Foreign Secretary could not have remained in it once it was known that he was complicit in a plot to oust Corbyn. What’s now clear is that not only have those shadow ministers who joined in an attempt to create a unified team between the Corbynites and the mainstream failed but that they recognise it and are prepared to act.

So far (at the time of writing), Hilary Benn and Heidi Alexander are the only two confirmed departures. Which others will follow is the next key question. I imagine that top of the list of members that journalists will be currently scrambling to contact will be Andy Burnham, who has been about as visible as George Osborne since Thursday. A declaration there either way will give a good pointer as to where the careerist wing sees their interests as heading (though I expect he’ll do everything possible to avoid making comment).

Corbyn now faces three immense hurdles if he’s to hold on. I do not believe that he can clear all three and it’s quite possible he won’t try. They are:

Firstly, he needs to see out this day. In one sense, all he needs to do is exhibit serene fortitude. Front benchers can be replaced (probably) and storms can be ridden out. In another, this storm will be like no other which he’s faced, nor any other I can think of which any other party leader has survived. But then Corbyn is a leader like no other.

Secondly, he needs to survive the No Confidence motion which will presumably be voted on by the PLP on Tuesday if events haven’t intervened before then. If it does go that far, he’ll probably lose. Technically, that vote is only advisory – it carries no constitutional weight within the Labour rule book – but that’s like saying that the Brexit vote was advisory: you’d need to be David Lammy to think that you could credibly ignore it. (It is ironic that what will finally bring Corbyn down is his being closer to the Labour voters than the MPs).

But if he does survive or more likely, ignore events within parliament, Labour is now in a position from which a formal leadership challenge can be launched. There hasn’t been one of these since 1988, when Benn snr challenged Neil Kinnock and lost by more than 7:1. By another irony, it’s Benn’s son who is now best-placed to challenge his one-time colleague.

The problem up until now was that unlike with the Tories, there was no mechanism by which a Labour leader could be forced out without electing someone else at the same time – and the realistic alternatives were within the shadow cabinet so wouldn’t allow their names to be nominated. No longer. If push comes to shove, there is now the candidate, mechanism, support and moment for such a bid to be launched.

Push probably won’t come to shove. Corbyn must know now that the game is up to such an extent that his continuing in office would damage the causes he believes in. He – and by extension, they – would become a laughing stock if two-thirds or more of the PLP were beyond the whip. I don’t see how he can last the week. I wouldn’t be surprised if he doesn’t last the day.

As for who will replace him, Watson seems best-placed. If Corbyn does resign, Watson would act as leader which would give him the chance to impress in office at a time when he would not be overshadowed by his predecessor. He’d also have the advantage of being seen to be a unifying candidate. Of the others, Benn has clearly shown leadership capabilities but I suspect his actions have damaged him too much in the eyes of too many. MacDonnell has already ruled himself out but I can’t see there not being a full-on continuity-Corbyn candidate: after all, it’s not the policies of the leader which have brought about his downfall. The Shadow Chancellor may yet be persuaded; if not, a protege is likely. And similarly, after ousting Corbyn, the mainstream must nominate one of their own unless they’re willing to forego that privilege and swing in behind Watson in a stop-the-left move. For now, it’s advantage Deputy.

David Herdson