Decision Day: Brexit Betting Odds vs Polls. Who to believe?
With voters going to the polls today to vote on the EU Referendum, William Hill spokesperson Graham Sharpe has reported that this referendum have drawn record betting volumes for a political event.
We have been taking bets on the outcome of an EU Referendum since January 20, 2013,” he said, “when a customer from Jersey staked £20 on Leave. At that time the odds were 8/11 (57%) ‘Remain, Evens, (50%) ‘Leave’, the closest they have ever been. Now there is some £20 million riding on the outcome with fixed odds bookmakers.
The largest bet William have taken has been for £100,000 on Remain at odds of 2/5. The largest Leave bet they have taken has been for £10,000. While that is partly attributed to the relative odds and returns of Remain and Leave, it is also indicative of the far large amount of money wagered on Remain.
A woman in London placed the biggest Remain bet at £100,000 ($147,750) with odds of 2/5, which would yield a £40,000 profit if the gamble comes good.
Meanwhile, another London woman placed £10,000 ($14,750) on a Leave vote at odds of 11/4, potentially making a profit of £27,500. Remarkably, it was her first ever bet.
Betting Odds on Leave vote have lengthened considerably over the last few days, with best odds available of 10/3 via Betfair, vs 6/4 just last week. Best odds for Remain are currently 1/4. Last week we saw 4/6.
Latest Betting Odds
With time running out to place a bet, see below the latest betting odds in our odds comparison table.
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Betting Odds vs Opinion Polls
What has been most interesting from a betting perspective about this referendum has been the discrepancy between the betting odds and the opinion polls. While the polls have been largely predicting a close battle, the betting odds have always shown Remain as strong favourite, never higher during the campaign than 4/6 and most of the time around 1/3.
There is rationale behind this. The bookmakers set their odds based on supply and demand. While more bets have been made on Leave than remain, the value of bets on Remain is more than six times higher than that on Leave.
The question still remains which will prove correct, the polls or the bookies. We will only know for sure on Friday morning. However recent form indicates that it is more likely the bookmakers have got it right. Recall the last general election where the opinion polls were drastically wrong, even the exit poll on the day of the election. Also recall the Scottish Independence referendum, where the later opinion polls were showing a Yes vote while the bookmakers didn’t budge.
Reports from leading bookmakers and political betting pundits show they are almost all very confident that Remain will win the day.
Head of political trading at Betfred, Marcus Goddard said
It is massively likely we are going to get a vote to remain, because of the weight of money being bet. I would make it 80 to 90 per cent that we will remain, as opposed to something like a 50-50 split with the polls. It won’t be by a huge margin – by 55 to 45 per cent – but the vote will be for Remain. And possibly over the next couple of days the Remain odds will shorten even further.
His counterpart Simon Clare from Coral also agrees
I think the bookies have got it right. If the money [people are betting] comes to something – as is happening here – you should respect that money.
Some experts do have their doubts. While Hjalmar Kvam told the Independent that he rates Remain as being 86% likely to happen, even better than the betting odds reflect, there are warning signs that the bookmakers may be overestimating this. He admitted
He admitted: “At the back of my mind, there is the possibility that the high percentage of individual bets on Leave could be an indicator that we got it wrong.
In terms of the actual numbers of bets made it’s the other way round: 75 per cent of bets on Leave and 25 per cent on Remain. And in the last general election, a lot of small staking punters [like those now betting on Leave] voted for an outright Tory majority when we were saying it wasn’t going to happen.
However the fact that more bets in terms of volume being placed on Leave can be explained by the relative betting odds between Remain and Leave. The odds on Leave have looked attractive, with large returns in event of Leave winning. A casual punter would therefore be more inclined to place a smaller bet at long odds on Leave, than a large bet at short odds on Remain. However when it comes to the serious large scale punters, the vast majority of money is going on Remain.
As Mark Goddard explains
You are getting lots of fivers at 3/1 on Leave, and then occasionally you get somebody from the City wanting £10,000 at 1/4 on Remain – because he stands to win £2,500. And that blows all the fivers on Leave out of the water. Industry-wide, I think £30m will be bet on the referendum with £25m going on Remain, and just £5m on Leave.”
The political head of betting at Ladbrokes also has his doubts, believing that it is possible that the betting odds are over estimating the chance of Remain winning.
When it comes to my personal opinion, I think the betting markets are overconfident of Remain’s chances. They should still be favourites, but personally, I would put Remain’s chances at [only] 67 per cent
On balance the view at Novelty Bets is that the Bookmakers have got it right, and while the end result will be close, Remain will come out victorious. Roll on Friday!