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10 July 2024

Placing bets is unwise – and not just for Tory MPs

Gambling on elections, markets, football, or anything makes fools of us all.

By Will Dunn

One thing most people will remember from the 2024 general election campaign is the betting scandal in which a number of people in the Conservative Party – some of whose guesses might have been, shall we say, educated – placed bets on the date of the election just before that date was announced. But another, more far-reaching scandal took place in full view, and it illustrates why gambling is always a terrible idea.

During the campaign, I repeatedly checked the odds being offered by the UK’s biggest betting companies on the outcome of the election. For weeks, one of the most popular bets being placed was that the Conservatives would win an overall majority. This wasn’t because anyone thought this was likely to happen, but because the bookies were offering exceptionally long odds on a Tory majority in order to persuade punters to give it a go, typically 150 to one.

I can guess why people took this bet. A Conservative win has been the most common outcome in UK general elections for over a century, so in the absence of any other information, a £50 bet might have looked like an easy £7,500. There was other information, of course – the polls that predicted a Tory wipeout – but that’s where team loyalty comes in.

Studies have shown that sports fans are strongly disposed to bet on the team they support when that team is losing. This is known as “information avoidance” – betting on your team is a way of refusing to accept that they are three-nil down – and it makes the bookies a great deal of money, because it involves the punter betting on an outcome even as it becomes less probable. This is why the big bookies are so keen to frame gambling as “entertainment” that augments people’s enjoyment of sport, and to sponsor sporting events; fans are easily manipulated.

By polling day, over 30 per cent of all bets placed on the outcome of the general election were on the irrational expectation of a Tory win. The bookies might argue they really did think there was a 150-to-one chance of this happening, but they’d have to explain why they offered odds for a Reform majority at 80 to one. Nobody is going to persuade me that a multinational gambling company, equipped with a small army of data scientists, mathematicians and analysts, decided that Reform had nearly twice as much chance of winning the general election as the Conservatives. The point seems pretty clearly to have been to sell irrational bets.

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That is, of course, the whole point. The betting and gaming industry’s revenues reached £15.1bn in the year to March 2023. Persuading people to base their bets on hope or loyalty rather than rational expectation is the secret of their success.

A few years ago I interviewed someone who worked as a data scientist for a large gambling company. They told me of a piece of work they’d done to identify the real probability of making money from gambling. Ignore the quoted odds, they said: over time, across the spectrum of things people bet on in the UK, the chance an average punter has of actually winning money on any given bet is roughly 100 to one.

The rational response to any offer of gambling is therefore not to take part, especially when you consider that there are significant risks involved in winning. In his account of gambling addiction, Might Bite, the cricketer Patrick Foster gives a rare glimpse of a problem that affects 1.4 million people in Britain, and leads to an estimated 400 suicides a year in England alone. Foster writes of winning the first bet he placed as a 19-year-old student; he did not realise then that it was the beginning of an addiction that would very nearly kill him.

There are lots of transactions in which we have to guess at an outcome without much information. Will the second-hand car break down? Will the Airbnb host cancel? Bets are the only transactions in which we can have no doubt we are being sold a dud. It’s not just Tory MPs for whom placing bets is unwise: the gambling industry makes a fool of anyone who lets it.  

[See also: It’s time for elderly millionaires to taste austerity]

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This article appears in the 10 Jul 2024 issue of the New Statesman, All Change