Think you can predict the Tory leadership race? Why not place a bet on it? If pub gossip is anything to go by, a cheeky flutter has become the vice of choice in Westminster. Even Nigel Farage is at it. Days after launching the Brexit party, he famously staked £1,000 that they’d win the European elections – picking up a cool £3,000 weeks later.
But just how easy is it to beat the bookies – or even your fellow punters? As someone with a mixed record on these things (a hefty win on the 2015 election followed three years of hit-and-miss), these are my tips on political betting. Some of them I followed at the time… others I wish I had done.
Hedge your bets
The dream scenario for any gambler is to win either way. Your aim is to spot the favourite before they become the favourite, thus allowing you to hedge your bets. Take the Democrat primary race for 2020. Imagine for a second that you’re impressed by one of the junior candidates and back them £100 at 12/1. After a while, your candidate rises in the polls, finally emerging as the new favourite.
In that situation, you might assume you’re on to a winner (some bookmakers might even offer you £500 to cash out…). But don’t count your chickens: what if your candidate is hit by a sex scandal or bombs in a televised debate? The smart punter would purchase insurance by betting on the next two candidates. Say they’re at 5/1 and 7/1 – put £100 on each and you stand to make at least £200 in any scenario (£900 if your original punt is right).
Be warned though – creating these win-win situations is more difficult than it sounds. If you do manage to do it, though, you’d be foolish not to hedge.
Be wary of crowds
The danger with political betting is its sensitivity to hype. Take the Brexit party: after their victory in the European elections, punters flocked to back them in the Peterborough by-election. As the money piled on, their odds shortened – generating more media hype. By the time voters went to the polls, a Brexit party offered around profits of less than 10%. Then came the result: Labour victory.
What went wrong? From a bookmakers’ perspective, nothing. The problem lies in how we talk about betting. When we call the Brexit party ‘favourites’, all we mean is that they’ve had the most money staked on them. The bookies aren’t predicting anything: they’ve merely shifted their odds to encourage bets on the other parties (thus limiting their exposure is the Brexit party did win).
Unfortunately excited newcomers – and some political journos – read the situation wrong, and figured the Brexit party were a dead cert. A costly mistake to make.
Bet against the news cycle
How do you avoid falling for the hype? One way is to bet against the news cycle.
A recent example: after Michael Gove’s leadership campaign was rocked by drug-taking allegations, his odds heightened sharply. After a spirited fightback, they’ve since come in considerably. If you’d backed him before that, you’d be smiling. It’s the same when parties get a bad poll result – betting markets overreact and go too far the other way.
In my experience, these weak moments are the best time to place your bet. It isn’t a foolproof strategy (what if Gove had dropped out on Monday rather than go ahead with his launch?) but in a long campaign like the Tory leadership race it can work well. Most candidates will have their blips and you can be ready to back them when they do.
Be quicker than the bookies
These days the bookmakers will give you a price on anything. Lately they’ve even offered markets on House of Lords by-elections for hereditary peers. While these smaller markets keep political anoraks busy, they’re very difficult for the bookies’ themselves to keep up with – which can result in open goals for the savvy punter.
During the 2017 Lib Dem leadership campaign, I remember seeing ‘breaking news’ (a stretch of the term admittedly) on Twitter that the likely frontrunner Jo Swinson had decided not to run. I decided to check my bookmaker. Sure enough they hadn’t updated their market. That meant I was able to enjoy over-generous odds on all the other potential runners. £200 on each of them please.
If you can’t beat them, join them
Fancy your luck as a bookmaker yourself? Some firms let you do just that. In the trade it’s called ‘lay’ betting.
Here’s how it works: say you think that the odds on Labour winning the next election (6/4 at the time of writing) are too flattering to Corbyn’s clique, you can try take rival gamblers’ money yourself by offering more favourable odds than the bookmaker (say 3/1). It’s not always as easy as it sounds (what if someone else is offering 4/1 – would you risk outbidding them?) but it can be done.
If you want to ‘lay’ a bet, you’ll need to put up the cash in advance (as will the punter), which is then held by the bookmaker in escrow and passed on to the winner afterwards. It’s high stakes, but lucrative when it works out. Good luck!