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The art of the political wager: how to make money betting on the general election

The only certainty about this year's election is that it will break all previous betting records. So who should you be placing your money on?

Photomontage by Dan Murrell

At the end of October 2008 I found myself in Las Vegas, as one does. I was not there for any of the customary purposes, though I might have played a few mindless late-night hands of blackjack for the sake of it. I was there to follow Barack Obama, then on the verge of the presidency, and campaigning in the swing state of Nevada.

Obama spoke to a large, zealous Saturday-afternoon crowd on a high-school football field. But the sight that really struck me came early that evening, in a suburban shopping mall. Nevada was one of the states that had embraced early voting, and already – ten days before polling day – the voting machines were in full cry, and easily mistakable for the one-armed bandits that are permanent fixtures in Las Vegas malls.

But Nevada has enough gambling oppor­tunities to go round. These machines attracted a long line, not of casino-goers, but of the people who attend to their needs. They were young, mainly female and non-white. And there was no need to be intrusively journalistic and ask the bleedin’ obvious: they were not queuing to pick John McCain, who had secured his Republican base by transforming himself from a thoughtful and original politician into a fat-headed curmudgeon.

At once it was clear to me not merely that Obama would win Nevada and thus the nation, but that in effect he had won already. I shared this thought with my newspaper readers, but there was something else I would normally have done: backed my judgement with money. Three things stopped me.

First, the notion of President Obama was no longer startling – he was now heavily odds-on, which is not my kind of betting. Second, I had (forgive the little swank) started putting money on Obama in the UK more than a year earlier, when it was generally assumed Hillary Clinton would be the Democratic nominee. Third, such a bet here was out of the question. Even in the gambling capital of the world, American squeamishness is overwhelming. Though nearly every state has a lottery, bookmaking is frowned on by polite society; and betting on politics is considered sinful. A nice man from the trade magazine Gaming Today explained the background to me: in 1980, when the TV soap Dallas was the talk of the planet, one casino, in addition to its normal prices on American sports, had issued prices for Who Shot JR?. The Nevada Gaming Control Board went apeshit and banned all bets on non-sporting subjects.

And to this day the vagaries of US law make the practice difficult and hazardous anywhere from Washington to Waikiki. It has become even tougher since the demise in 2013 of Intrade, an Irish-based “online prediction trading exchange”, which for a time successfully disguised political gambling in the garb of a stock market. There are still the Iowa Electronic Markets, run by a university business school, which, “for educational and research purposes”, are allowed to accept small bets – $500 absolute max over an entire four-year election cycle – to create a simulacrum of a real market. In Britain last year a Surrey businessman placed a total of £900,000 with William Hill on a No vote in the Scottish referendum (he won £193,000).

That is a little out of my own league, but on the whole I am pleased to live in a country that makes it harder to shoot random strangers than have a bet. My name is Matthew and I adore punting on politics. And I have no plans to give up – certainly not in the next three and a half months as we approach the most fascinating, multilayered and downright bettable general election in British history. Already odds are being offered about almost every imaginable contingency for polling day and after, including prices for every constituency from Aberavon to Yorkshire East. The two biggest bookmakers, William Hill and Ladbrokes, both had a turnover of more than £3m on the Scottish referendum, suggesting an industry total of £10m-£15m. There is perhaps only one certainty about the 2015 election: it is going to break all previous betting records.

The propensity to wager is an innate part of the human condition, and perhaps the divine condition, too: the Greek gods played dice to divvy up responsibility (Zeus won the skies, Poseidon the seas and Hades the underworld). More attestably, men were betting on political outcomes when sport was not organised or regular enough to offer an alternative. Stephen Alford, in his new biography, Edward VI, says that as the boy-king lay dying in 1553, merchants in Antwerp were betting on the disputed succession. In 1743, when George II made the nostalgic and quixotic decision to lead his own troops into battle against the French at Dettingen, it was said to be 4/1 in the London coffee shops against the silly fool getting himself killed. He survived.

In the late 19th and early 20th centuries there was a sturdy betting market on presidential elections among Wall Street traders which was well regarded for its accuracy in predicting the result. There was similar activity in the City of London and West End clubs – and with UK bookmakers, whose odds until 1961 were legally available only to the minority able to bet on credit. In the US, bookmaking got itself associated with the Mob and became ever more taboo. In Britain it was legalised and democratised.

Once the bookies came out of the shadows and into the high streets, political odds became universally available, and publicised. The first great contest after the arrival of betting shops was for the Tory leadership in 1963, with Rab Butler the odds-on favourite who got turned over, as some shrewdies must have sensed, by the 5/1 shot Lord Home. The Guardian reported a stinging attack on the practice by the Labour politician Ian Mikardo. “A sad day for Britain,” he called it. “The Tories have dragged the premiership down to the level of the Donkey Derby.” This constituted the most glorious piece of chutzpah. Mikardo is remembered these days as a) a highly effective left-wing operator and b) the semi-official Commons bookmaker, taking his colleagues’ political bets for decades.

Perhaps Mikardo resented the competition. But he was not the only one expressing doubts. Hills and Ladbrokes were already emerging as the Big Two betting firms in the new era, vying for the title World’s Biggest Bookmaker. The Ladbrokes boss Cyril Stein enthusiastically embraced politics as a business opportunity. The eponymous William Hill, still firmly in charge of his own firm, had moral qualms: “If this became a fever and millions of people went for it, I think it could affect the ballot box,” he said in a radio debate with Stein before the 1966 election. “And electing a government is a very serious business.”

Hill’s biographer Graham Sharpe admits his man lost that argument hands down, especially as he had by then already given in and started offering prices. No one else shared his view that anyone might vote primarily to support their bet. And Stein made clear in the debate there was no question of stepping across the real ethical divide:

“Would you be prepared to bet on anything?” the interviewer asked Stein.

“Anything living, yes.”

“. . . The number of people killed in the Vietnam war during a certain period, or dying during a cholera epidemic?”

“No, I said that we bet on anything living.”

The principle was thus established and has been very rarely breached since: no Battle of Dettingen-type odds. And what Stein had grasped was that taking bets on events beyond sport had a remarkable spin-off: it got the company name into parts of the media it would never otherwise reach. This was not about simple, calculable profit and loss: embracing events beyond the sports pages offered fantastic PR.

Deep down, Hill knew that, too. Two years earlier, in 1964, his firm had taken a £10 bet from a young man in Preston, David Threlfall, at 1,000/1 against a human landing on the moon by the end of the decade; the strict calculus suggests that the odds were crazed, as President John F Kennedy had set the goal before his death. In 1969 Hills had to pay Threlfall £10,000 (about £145,000 now, by the most conservative reckoning). It made the bookies cautious for a while, yet the impression was created that these are not legalised mafiosi but sometimes naive good sports, and it has paid massive dividends for them.

And so, the bookmakers still pursue this kind of business, from customised novelty (will a newborn son play cricket for England?) to reality TV (who will be next to be evicted from Big Brother?), with an eye focused far more on the headline than the bottom line. But no sane bookmaker now accepts serious money on this stuff, or indeed anything where there is a risk of insider trading (this includes betting on the next archbishop of Canterbury). On a general election, however, there is both huge interest and a level playing field: the PM hardly knows more than the rest of us. So it’s a win double for the bookies: acres of column inches and big turnover, too.

And the strange thing about political betting is that the punters can also have objectives over and above the customary chance of winning money. It is possible to identify at least four completely different types of bet never seen on a racecourse:

The insurance bet: This was particularly prevalent up to the 1970s, when a Labour government might have a serious effect on a rich man’s wallet. It existed even before betting shops: there were reports of large credit bets before the 1951 election and in the 1960s steel magnates were thought to have backed Labour heavily to get a consolation prize in case of nationalisation.

The momentum bet: When Clement Freud stood as Liberal candidate in the Isle of Ely by-election in 1973, he began as a 33/1 outsider. He then placed several £300 bets, enough to send the odds plummeting. “The clever money seems to be going on Freud,” said the Daily Telegraph. As the candidate later put it: “Actually, it was the Freud money going on Freud.” But it created the sense of impetus that has always been crucial to by-election upsets. Freud won and held the seat for 14 years. (When the Tories won it back, Freud was 5/1 on.) There were also persistent rumours, never confirmed, that Chris Huhne’s campaign team had hefty bets on their man before he lost narrowly in Lib Dem leadership campaigns to both Ming Campbell and Nick Clegg.

The heart-not-head bet: Though the big money in the Scottish referendum was for No, nearly all the small bets were for Yes, apparently coming from shiny-faced pro-independence voters anxious to back their hopes, not their fears.

The grandstanding bet: At the Rochester by-election last November Michael Gove publicly placed a £50 bet on the doomed Tory candidate. This had no purpose except to draw attention to Gove’s continued existence and ambition.

The original purpose of both sides – trying to make a profit on the transaction – is certainly not absent. Indeed, in recent years it has become more central. At the heart of this phenomenon is a new class somewhat different from the blokes who hang round the betting shops. Their bible is a somewhat clunky blog-cum-website, PoliticalBetting.com, founded ten years ago by an ex-journalist, university fundraiser and Liberal Democrat candidate called Mike Smithson, who lost his political betting virginity as a teenager in the 1963 Tory leadership shemozzle.

Smithson uses the slogan: “The view from OUTSIDE the Westminster bubble” (Bedford, actually), which for political betting purposes is definitely the place to be. No one can make money from the bookmakers by following conventional wisdom. And Smithson and his small team of contributors are particularly good at getting beyond that.

But of the two words in the site’s title, the first is more significant. This is a wonkish site first and foremost. I am not sure whether knowing that the Conservatives retained a seat on Rother District Council by winning the Darwell by-election adds to the sophistication of my political analysis, especially when I am not sure where either Rother or Darwell might be. But it certainly makes me feel clued up. As does the rigour Smithson brings to the study of polling data.

The site’s small profit, however, comes from the betting firms paying commission on click-throughs that generate custom, although the companies are just a bit wary of this new business. “I know who some of these people are,” says Matthew Shaddick, head of political betting at Ladbrokes. “A lot of them are political obsessives: activists, poll-watchers, or they work in political HQs. Real anoraky stats people, or political scientists with their own models.” In other words, not necessarily the mug punters the bookies traditionally love.

Shaddick is the embodiment of the industry’s response. He is 45, and took a degree in politics and modern history at Manchester before becoming a Ladbrokes lifer. A few years back, the firm was looking for someone in the office to look after the politics bets. “I put my hand up on the basis that it would take a couple of hours a week,” said Shaddick. Now it’s his full-time job.

Over at William Hill, political betting is largely overseen by the founder’s biographer, Graham Sharpe, who has been at the firm since 1972 and is now its media relations director. Sharpe is a long-standing master of the showbiz aspects of the operation. In particular, he arranged sponsorship to keep Screaming Lord Sutch in business as a national treasure through the 1980s and 1990s. Sutch was the indifferent pop singer and magnificent self-publicist who stood in 41 elections, passing 1,000 votes just once. (He added greatly to the national merriment, if not to his own, and committed suicide in 1999, aged 58.)

Sharpe took what is thought to be the longest-odds bet in history: £10 from Sutch that he would become prime minister at 15 million/1. It was understood that Sharpe would have been compensated for the inevitable loss of his job at Hills with a place in His Lordship’s cabinet.

Though their background and perspectives are very different, both Sharpe and Shaddick see politics as a major growth area. Excluding the skill-free but profitable internet casinos and one-armed bandits in the shops, the bookmakers’ core betting business is now split evenly three ways: one-third football, which is rising; one-third racing, which is falling; one-third everything else including politics – which Shaddick reckons is the fastest-growing area of all.

They also agree it is very different from other betting, and that there is little overlap between political punters and other clients until the final days of the campaign. Suspected political know-alls are treated with the same respect as a big-time racing insider. It is both a nuisance and a badge of honour to try to place a carefully worked-out wager and be told by a huge and allegedly fearless multinational that it will only accept a sum that would not even shake the toytown Iowa Electronic Markets, because the computer knows who you are.

This is especially likely if you are betting not on the next prime minister, or most seats, but on something obscure: perhaps supporting an outsider in a constituency the bookmakers had not even thought in play. It is possible to finesse that by tramping round the shops and forking out a large number of small sums, but even that way head office gets wind eventually. This is a complicated battle of wits.

There will be NS readers who no doubt regard this entire article with horror, who share not just the original William Hill’s disdain for gambling on politics but a detestation for betting of all kinds. Some of them will be members of parliament. However, they are the real gamblers. Most of us would be terrified by the notion of subjecting our career and livelihood to continual monstering by the press and Twittersphere, interspersed with periodic revalidation by public whim.

Of course gambling can ruin the lives of those without the capacity for moderation, just as drinking can. But it is different for genuine punters. By that I don’t mean Lottery players, but people who aspire to make rational predictions about future outcomes, be it a horse race or a three-way marginal, and who back their judgement with affordable sums of money – and understand that betting is about honourable defeats as well as victories because it is a search for value, not certainties. For them it is a constant source of intellectual challenge and occasional delight. A hobby to help ward off boredom and dementia: more lasting than Candy Crush and FreeCell; more piquant than a crossword; and cheaper than golf.

The idea that the bookmakers must inevitably win has in fact never been less true. The days of the 10 per cent tax on every bet have gone; the internet provides instant price comparison sites; and hot competition from new entrants, especially the betting exchanges, has forced the companies to slim their once-obese profit margins.

And political betting has a particular appeal because the relevant data is so transparent. True, I would have saved myself some money if I had got inside Alan Johnson’s head and realised he appeared to be serious about not wanting to become leader of the Labour Party. But most of the time the information is out there and just needs to be collected, processed and understood. In racing, no student of form knows what a trainer might be up to; and no trainer knows for sure how his horse really feels. No football expert can accurately predict the day when Manchester City might just screw up against Burnley.

We aficionados all have our failures, heaven knows. But we can smile about our past triumphs, as over some long-ago night of passion. I was a fairly early Obama backer but Mike Smithson spotted him long before I did and backed him to be president at 50/1. My own moment of glory came in 1990, when I divined that Michael Heseltine would indeed topple Margaret Thatcher but then get punished by being deprived of the prize himself; therefore I knew – just knew – that the answer to the question simply had to be John Major, at 10/1. And I kept betting until Hills told me to get knotted.

I am relishing the 2015 election first and foremost because I care about my country and want it to be run by politicians who share my vision of its future; second because, for a journalist, it will be fascinating to write about; and third, because I hope that I might just have another moment of blinding insight to match the one I had 25 years ago. Which may be lucrative in a medium-sized way – and gloriously satisfying.

Matthew Engel is a columnist for the Financial Times and the occasional political betting columnist for the Racing Post. His latest book is “Engel’s England” (Profile)

This article first appeared in the 23 January 2015 issue of the New Statesman, Christianity in the Middle East

Ralph Steadman for the New Statesman.
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Tim Farron: Theresa May is "the prisoner of the Ukip wing of her party"

The Liberal Democrat leader on his faith, Blairism and his plan to replace Labour as the opposition. 

This is Tim Farron’s seventh general election. His first was in 1992, when his Tory opponent was a 36-year-old called Ther­esa May. He was just 21 and they were both unsuccessful candidates in the Labour fortress of North-West Durham. He recalls talking “to a bunch of ex-miners who weren’t best pleased to see either of us, some kid Liberal and some Tory”. Now he sees his former and current opponent as “the prisoner of the Ukip wing of her party . . . I think it has rendered Ukip almost pointless – she is Ukip now.”

May was elected to parliament in 1997, but it took Farron until 2005 to join her. She leads the dominant Conservatives while he heads a party of only nine Liberal Democrat MPs. Still, their reversal of fortunes gives him hope. “After the 1992 election, every­one said there’s no way for a non-Tory government, and it turned out there was. So let’s not assume it’s a given there’s a Tory government [for ever].”

In April, I accompanied Farron to Manchester Gorton, in the lead-up to a by-election that was cancelled by May’s decision to call a snap election on 8 June. Still, the 46-year-old’s party has been in campaign mode for months; Lib Dems spoke of using last December’s Richmond Park by-election to test their messaging. It clearly had an effect: the incumbent Conservative, Zac Goldsmith, lost to their candidate, Sarah Olney.

Brexit, to which the Liberal Democrats are vehemently opposed, will be a dominant theme of the election. Their party membership has just exceeded 100,000, close to an all-time high, and they have enjoyed much success in council by-elections, with more to come in the local elections of 4 May.

However, any feel-good factor swiftly evaporated when Farron appeared on Channel 4 News on 18 April. He was asked by the co-presenter Cathy Newman whether or not he believes that homosexuality is a sin, a question that he answered obliquely in 2015 by saying that Christianity started with acknowledging that “we’re all sinners”.

This time, he told Newman, he was “not in the position to make theological announcements over the next six weeks . . . as a Liberal, I’m passionate about equality”.

The Channel 4 interview divided opinion. One Liberal politician told me that Farron’s stance was “completely intolerable”. Stephen Pollard, the influential editor of the Jewish Chronicle, described it as
“a very liberal position: he holds certain personal views but does not wish to legislate around them”. Jennie Rigg, the acting chair of LGBT+ Liberal Democrats, said it was “as plain as the nose on my face that Tim Farron is no homophobe”.

Farron declined the chance to clarify his views with us in a follow-up phone call, but told the BBC on 25 April: “I don’t believe that gay sex is a sin,” adding, “On reflection, it makes sense to actually answer this direct question since it’s become an issue.”

For his critics, Farron’s faith and politics are intertwined. He sees it differently, as he told Christian Today in 2015: “. . . the danger is sometimes that as a Christian in politics you think your job is to impose your morality on other people. It absolutely isn’t.”

Tim Farron joined the then Liberal Party at the age of 16 but didn’t become a Christian until he was 18. Between completing his A-levels in Lancashire and going to Newcastle University to read politics, he read the apologetics, a body of Christian writing that provides reasoned arguments for the gospel story. “I came to the conclusion that it was true,” he told me. “It wasn’t just a feel-good story.”

In speeches, Farron now takes on the mannerisms of a preacher, but he had a largely non-religious upbringing in Preston, Lancashire. “I don’t think I’d been to church once other than Christmas or the odd wedding,” he says. “I went once with my dad when I was 11, for all the good that did me.”

When we meet, it is Theresa May’s religion that is in the spotlight. She has condemned the National Trust for scrubbing the word “Easter” from its Easter egg hunt, a row it later emerged had been largely invented by the right-wing press in response to a press release from a religious-themed chocolate company.

“It’s worth observing there’s no mention of chocolate or bunny rabbits in the Bible,” Farron reminds me. “When people get cross about, in inverted commas, ‘us losing our Christian heritage’ they mean things which are safe and comfortable and nostalgic.” He pauses. “But the Christian message at Easter is shocking, actually, and very radical.”

British politics is tolerant of atheists (such as Ed Miliband and Nick Clegg) alongside those who, like David Cameron, are culturally Christian but whose faith is “a bit like the reception for Magic FM in the Chilterns: it sort of comes and goes”. But the reaction to Farron’s equivocation on homosexuality prompted many to wonder if a politician who talks openly about his faith is now seen as alarming. Nebulous wishes of peace and love at Christmas, yes; sincere discussions of the literal truth of the Resurrection? Hmm.

Tim Farron’s beliefs matter because he has a mission: to replace not only Jeremy Corbyn as leader of the opposition but Theresa May in Downing Street. Over lassis at the MyLahore curry house in Manchester, he tells me that Britain is facing two calamities. “One is Brexit, indeed hard Brexit . . . and the other is a Tory government for 25 years. We have to present a genuine, progressive alternative that can not only replace Labour as an opposition, it can replace the Tories as a government.” This is ambitious talk for a party with nine MPs. “I understand the ridicule that will be thrown at me for saying those things: but if you don’t want to run the country, why are you in politics?” He pauses. “That’s a question I would ask most people leading the Labour Party at present.”

What does he think of May, his one-time opponent in North-West Durham? “She strikes me as being very professional, very straightforward, somebody who is very conservative in every sense of the word, in her thought processes, her politics, in her style.” He recalls her 2002 conference speech in which she warned Tory activists: “Our base is too narrow and so, occasionally, are our sympathies. You know what some people call us: the nasty party.”

“In many ways, she was the trailblazer for Cameron in being a softer-focused Tory,” he says. “It now looks like she’s been trapped by the very people she was berating as the nasty party all those years ago. I like to think that isn’t really her. But that means she isn’t really in control of the Conservative Party.”

Voters, however, seem to disagree. In recent polls, support for the Conservatives has hovered between 40 and 50 per cent. Isn’t a progressive alliance the only way to stop her: Labour, the Liberal Democrats, the Greens, the SNP and Plaid Cymru all working together to beat the Tories?

“Let’s be really blunt,” he says. “Had Jeremy Corbyn stood down for us in Richmond Park [where Labour stood Christian Wolmar], we would not have won. I could have written Zac Goldsmith’s leaflets for you: Corbyn-backed Liberal Democrats.

“I’m a pluralist,” he adds. “But any progressive alliance has got to be at least equal to the sum of its parts. At the moment, it would be less than the sum of its parts. The only way the Tories are losing their majority is us gaining seats in Hazel Grove –” he ticks them off with his fingers, “– in Cheadle, in the West Country and west London. There’s no chance of us gaining those seats if we have a kind of arrangement with the current Labour Party in its current form.”

What about the SNP? “Most sensible people would look at that SNP manifesto and agree with 99 per cent of it,” Farron says. “But it’s that one thing: they want to wreck the country! How can you do a deal with people who want to wreck the country?”

There’s no other alternative, he says. Someone needs to step up and offer “something that can appeal to progressive younger voters, pro-Europeans and, you know, moderate-thinking Middle England”. He wants to champion a market economy, strong public services, action on climate change, internationalism and free trade.

That sounds like Blairism. “I’m a liberal, and I don’t think Blair was a liberal,” he replies. “But I admire Blair because he was somebody who was able to win elections . . . Iraq aside, my criticisms of Blair are what he didn’t do, rather than what he did do.”

Turning around the Tory tide – let alone with just nine MPs, and from third place – is one hell of a job. But Farron takes heart from the Liberal Party in Canada, where Justin Trudeau did just that. “I’m not Trudeau,” he concedes, “He was better-looking, and his dad was prime minister.”

There is a reason for his optimism. “I use the analogy of being in a maze,” he says, “You can’t see a way out of it, for a progressive party to form a majority against the Tories. But in every maze, there is a way out. We just haven’t found it yet.” 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

This article first appeared in the 27 April 2017 issue of the New Statesman, Cool Britannia 20 Years On

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