WE’VE ALL SEEN the image, the one of the politician confidently placing a bet in their local bookies that they will be elected to the Dáil. It’s up there with nuns or islanders casting their ballots in the imagery we expect to see come election time. However, this traditional image of political betting doesn’t reflect the growing significance of political betting in elections.
The Tories overwhelming victory in this year’s UK Election came as a massive shock. The long-predicted hung parliament never transpired. The pollsters – all of them – had gotten it horribly wrong. There were even calls for an inquiry.
But plenty of canny punters were counting their winnings, and many more who tracked the odds won’t have been all that shocked. With our own General Election on the horizon, will we be able to trust our polls to predict the outcome, or would we be better off consulting with the bookies?
GE2016
The biggest question in Irish politics at present is the outcome of the upcoming General Election. Much has been made of Fine Gael dropping points in two successive polls, 5 points in a Millward Brown poll and 3 points in a REDC poll. If these polls are to be believed, Fine Gael holds a slim lead over the chasing pack of Fianna Fail and Sinn Fein. In contrast, the betting markets make Fine Gael 2/9 favourites to win the most seats. This price implies a probability of 82% or in layman’s terms, a ‘good thing’.
The betting also points to Fine Gael winning approximately 52 seats, Fianna Fail 32, Sinn Fein 26 and Labour 12 – with Independents and others taking the rest. The question for those who read the political tea leaves is what stock to place in these markets. Should politicians draw hope or fear from them or should they casually claim “That’s not what I’m hearing on the doorsteps”?
Game changer
In the past betting markets could be dismissed as sideshows to trusted polling methods. Polling, as we know in Ireland, dominates political discussions and generates its own headlines. Indeed, the UK General Election was the most polled UK election ever. If anything, this only amplified the shock Tory landslide when it did come. Pollsters, and many others, have since struggled to explain the vast difference between poll predictions of a hung parliament and the final result – decided by the ‘shy Tory’ vote. Some put this failure down to polling methods, others to the public’s tendency to lie. Whatever the reason, it’s no longer only politicians casting doubt on unfavourable polls.
A recent London School of Economics review also found that the accuracy of constituency level betting in the General Election was more accurate than some detailed models developed to predict the election result. While not foreseeing the ultimate scale of the Tory victory, the betting markets had a clear lead throughout for the Conservatives to win most seats. Over £100 million was wagered in the UK on a host of markets from constituency level seat winners to the make-up of the new Government, amongst many others.
This made it the largest non-sporting betting event in the UK this year and catapulted political betting into the mainstream media coverage of the election. Suddenly, political betting was no longer a novelty.
Putting your money…
While betting markets are not an exact science, betting on an outcome is a judgement call on what you think will happen. In contrast, most polling is a snapshot of the political landscape at a point in time. This means voters are not being asked what they think will happen rather where their support lies at that point.
An interesting comparison was a question asked by REDC before the Marriage Equality Referendum. The company used an innovative ‘Wisdom of Crowd’ method to ask voters what they thought the actual result would be instead of how they would vote. The result was a correct prediction of a 62% Yes vote. The last REDC poll taken before the vote predicted a 69% Yes which was 7 percentage points off the final result – which in polling terms is an ocean.
This polling method shows that focusing on outcomes, as betting markets do, can help in balancing temporary swings with likely election results.
Self-fulfilling?
Monitoring trends in political betting is not without its own pitfalls. As with polling movements, the danger exists that market trends can become self-fulfilling. Nevertheless, Irish political culture obsesses over any changes in the political temperature so the data markets provide can no longer be ignored.
Rather than writing off polls and replacing them with betting markets, it’s probably more accurate to say both will have a significant role to play in assessing our General Election. Whatever the final result, it’s a safe bet that political betting markets in Ireland are no longer just the preserve of political anoraks and hopeful candidates.
John Byrne works in Public Affairs for Drury | Porter Novelli, a full service public relations agency based in Sandymount, Dublin. You can find him on Twitter @JohnJimByrne
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