Can odds be used as an alternative to opinion polls?

Can odds be used as an alternative to opinion polls?

Monday, June 20, 2016 Totally Gaming
Betting markets are increasingly used as a method of predicting election results

While William Hill revealed on Monday it expects £20m (€25.9m/$29.4m) to be wagered on this week’s UK referendum, experts have warned against using betting market odds as a method of predicting the outcome of the vote.

With the credibility of traditional opinion pollsters having fallen considerably since companies such as YouGov produced a wealth of inaccurate data ahead of last year’s General Election, many have looked at the odds offered by bookmakers and exchanges as a method of forecasting the referendum outcome.

However, website Portfolio Adviser, quoting an analyst from financial services company Nikko Asset Management, said that a series of variables made it impossible to draw a correlation between odds and outcome. As well as the fact that amounts of money rather than number of bets plays a significant part in the odds, Nikko AM senior portfolio manager Simon Down said that there is likely to have been a huge shift in public opinion since the vote was called four months ago.

“Betting odds are largely dictated by weight of money rather than a sophisticated analysis at betting companies themselves,” Down said. “The average amount for Remain betting is likely to be heavily biased by a number of very large bets.”

Portfolio Adviser said this implies that the odds could have been driven down to unrealistically low levels by big Remain bets in previous months, while in fact the real possibility of Brexit has always been higher than the bookmakers suggested. At present William Hill makes 'Remain' 3/10 favourite (76.9 per cent chance), with 'Leave' offered at 5/2 (28.5 per chance chance).

A William Hill spokesman said: “The referendum is on course to produce a £20m betting turnover, making it the biggest political betting event we've ever seen. To this point, 67 per cent of all the money staked on the EU referendum outcome is for Remain, but 69.6 per cent of all individual bets placed are for Leave.”

TotallyGaming.com says: “This is a hot topic at the moment, especially with so much media focus on predicting how the referendum will transpire. With bookies’ advanced technology and systems, as well as the growing importance of political betting, markets will continue to be seen as a barometer of how the electorate intends to vote.”

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