General Election 2015: Who to bet on in Northern Ireland
As pollsters, we regularly review the election betting odds quoted by the bookmakers and betting exchanges. And the Bookmakers avidly follow the polls to spot any changing trends. As such, we thought it would be interesting to compare the election polling to the bookmakers odds, and perhaps pick-out a few good bets for the Northern Ireland (NI) seats.
First of all, it should be noted that there are important differences between polls and the bookmakers. Yes, they are both dealing with the election, but the two industries approach the situation from different angles.
Polling companies research elections for political parties and other organisations in order to track how public opinion is moving on a whole range of election issues, including voting intention. The polls are snapshots, and help political parties and organisations tailor their own policies to suit the election campaign. Polls are not necessarily election result predictions, although Opinion Polls close to election day, should be reasonably accurate in terms of reflecting the final election results.
Bookmakers are different, and don't set odds as an attempt to provide an accurate forecast of the election result (or horse race), they set odds to attract money. Bookmakers often set odds say at 10/1 knowing full well the candidate (or horse, football team) is in reality a 40% chance - this would be to create initial interest and attract bets. They also do this in reverse. Other industries are similar e.g. retailers will advertise offers on products to get people into their stores, not to necessarily sell those products, but other products they are promoting in the store. It's called marketing, and we live in a market economy. This is quite legitimate and bookmakers will openly admit this to you - as a bookie said to me 'we're in this business to make money, not forecast results'!
Re. this last point - if the bookies were giving you the correct odds, then the odds (in % terms) for all candidates in any seat should add up to exactly 100%, as one of the candidates must win - correct? However, look at the odds for any of NI's 18 Westminster seats, and they will add up to much more than 100%, maybe 130-150%. This extra 30-50% is the bookmakers profit, which is called the 'overround' in the trade (the overround in the Grand National can be as high as 80%!). Again, there is nothing wrong with this - It's a business, and the bookmaker has to pay staff salaries, rent, rates, and earn a crust for himself.
Taking into account the way bookmakers work, then the seasoned punters look for 'value', i.e. trying to find 9/1 chance on a situation that they think realistically is say 4/1 - If the chance wins then you get a positive return on your investment. Financial traders operate the same way. A good example of 'value' occurs on the 'Who wants to be a Millionaire' TV Quiz show. You reach £64,000 and take the 50/50 leaving you with two possible answers - if correct you go to £128,000, if incorrect you drop to £32,000. As such, even if you haven't a clue, you should guess, because you're getting a 50/50 (i.e. a coin toss) on a 2/1 situation i.e. winning £64,000 vs losing £32,000 - that's value!
So we've had a good look at the odds for NI's 18 Westminster constituencies, as quoted by local bookmakers McCleans and Paddy Power, and tried to locate a few 'value' bets. Not surprisingly a lot of the seats are not worth looking at in terms of a bet e.g. for West Belfast Sinn Fein are quoted at 1/100, which means you have to bet £100 to win a £1 - That's hardly value!
Not surprisingly, the most interesting odds have occurred in seats where our polls have said the result could be close. East Belfast may have offered some good value bets earlier, but this has been dampened by the Unionist election pact, with the DUP now at 1/7 with Paddy Power and 1/10 with McCleans.
So looking around, our two best bets are: SDLP - South Belfast at 4/7 with both McCleans and Paddy Power - the polling shows that that the correct odds for the SDLP to hold South Belfast are about 4/9 to 2/5, so that's some small value. Plus for a good outside chance, look at Sinn Fein for Upper Bann at 12/1 with Paddy Power (NB 5/1 with McCleans, so a difference of opinion between the bookmakers!). For Sinn Fein to win here, it would require the Unionist vote to split in a very specific way between the DUP and UUP - this is unlikely, but it could happen! Our polls show the chances of a Sinn Fein win in Upper Bann to be around 12-15%, so Sinn Fein at 12/1 is again good value!
NB all quoted odds were correct at time of publication.
Bill White is Managing Director of Belfast polling and market research company LucidTalk, polling partners to the Belfast Telegraph. You can follow LucidTalk on Twitter: @LucidTalk.