Political betting feature in the Financial Times
December 7th, 2007-
FT REPORT A finger on the political pulse
by Ross Tieman, Financial Times - Published: Dec 07, 2007
Mike Smithson is on a roll. Britain’s foremost political spread betting aficionado is profiting from the opportunity bonanza offered by political upsets in the UK and the US presidential race. “It’s been a great autumn,” he says. “I have got a hefty wadge that has been transferred into my bank account. Since October, I have done about £6,000 [of profits].”
You can’t make a living from political spread betting, says the author of The Political Punter- how to make money betting on politics , but you can certainly turn an interest into a nice little earner.
The end of Prime Minister Gordon Brown’s brief political honeymoon and the campaign-trail upsets of candidates for the Democrat and Republican nominations are meat and drink to Mr Smithson, a former political journalist.
He has been betting on politics since he was at school in 1964. But it was only in 2004 that his fascination with political betting led him to set up www.politicalbetting.com, a discussion platform and information service for political gamblers.
Feeding the development of political gambling is in his own interest. Mr Smithson estimates that there are as few as 1,500 regular political gamblers in the UK, although the number swells to millions on the eve of an election. US constraints on online gambling have impeded the development of a political gambling market there. But Britons are just as happy to bet on US elections as their own. Mr Smithson says British wagers on the 2004 presidential election totalled £35m, against maybe £25m of bets on the UK Parliamentary election the following year.
So what’s going to happen at the next UK general election? “I don’t know,” he says. “I am betting on what I think the market will think.” It is a vital distinction. The liveliest bets are currently on how many seats the Conservative party will win at the next general election, whenever it is held.
The Labour party needs to win 325 Parliamentary seats for a majority in the House of Commons. As Labour’s fortunes have waned, political gamblers, who seem in the majority to be Conservative supporters, have bet on the Conservatives winning an increasing number of seats. By anticipating that they would back their rising optimism with bets, Mr Smithson has made money.
Mr Smithson plays for modest stakes - typically £100 a seat, and closes his positions inside three weeks. In November, he bet on a rising market in Conservative seats at 291-293 and the spread rose to 295-302, giving him a five-point gain. He watches opinion polls closely. He tries to anticipate the political betting market. “For the next month I know where it is going,” he says. Does that apply to the US race too? “I am quite heavily committed at the moment,” says Mr Smithson. The market is moving fast as perceptions of candidates change rapidly in the run-up to the January 3 Iowa caucus. “I think Hillary Clinton is not going to do as well as people are expecting,” says Mr Smithson. “I am a Hillary seller at the moment.”
Among Republican candidates, Mr Smithson is a bull of Mike Huckabee, an old-fashioned conservative from Arkansas. “I think he is going to do quite well in Iowa.”
But is the political betting market any good at predicting real-life outcomes? “I think it is,” says Mr Smithson. But if you want to consistently profit from it, he says, you have to exit before the actual elections arrive.
The above has been reproduced in full from today’s Financial Times
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Great stuff Mike. I hope you will remember us minnows when you are Lord Smithson of the Cayman Islands!
Congrats Mike. Nice to see you showing those economic journos how to make some money!? Be careful about being too open about how much you make though otherwise you’ll have local Lib Dem parties like mine seing you as our own Lord Ashcroft!
Very good article Mike - well done.
Following on the last thread on Huckabee, my own view is that he doesn’t have to win NH (GWB didn’t). A solid 3rd or 4th keeps him plenty viable until South Carolina, which I believe is traditionally the kingmaker primary for the GOP.
Thanks StJohn for pointing out the VCbet Iowa odds are back up, I tried to put some more on Huckabee now (as you can lay him at close to 1/2 on Intrade), but they wouldn’t let me put anymore on since I maxed out at the 14/1 they were offering a while back.
Well done on the article Mike! Interesting too.
The problem you identify, Mike, is that we are all betting against each other, in effect. If it’s only 1500, that means we know most of them from their comments here. So it’s not even guessing what the market thinks, it’s guessing what PB.commers think. That could give you an unfair advantage, no?
Still we can still take a couple of pfennigs off the amateur punters come election time.
5. To avoid any doubt, I am not accusing you of talking up your own book. You have always been scrupulously fair in setting out your stall and your positions.
3. Cheers Caveman. I’ve managed to get some on at 11/8 but they capped my stake. Wish I’d got 14/1!
re 5 & 6. The 1500 figure refers solely to serious spread-betters - not to broader betting.
From the above thread:
“In November, he bet on a rising market in Conservative seats at 291-293 and the spread rose to 295-302, giving him a five-point gain.”
Does Ms Tieman know the first thing about spread betting?
A larger number of political punters would improve the spread betting liquidity, which would be welcome. The downside of increased political betting popularity is that the High Street Bookies would become more savvy and the betting opportunities available there, from time to time, would reduce. But compared to the profits available by correctly predicting the spread movements, these opportunities are probably much less significant.
re 9. In fact on most of that bet the prices I bought at were in the range of 291-293 and I sold at 305.9
9 clearly not as even I can see that’s wrong and I really can’t get the hang of spread betting - I need to get Mike’s book for Christmas.
More coverage for the Great Mike!
O/T I don’t see such strong reaction to The Economist endorsing John Mccain, but even as a British Lib Dem, I do see the point of him- in many ways he represents the principled heart of the Republican party, and to be honest he does stand out that way versus the- shall we say- more devious candidates in the field.
9 I can only assume that she has taken the difference between the bid/offer spread at the earlier date, i.e.2 seats from the corresponding difference, i.e. 7 seats at the later date.
You just can’t get the staff these days!
Good stuff Mike. After your post about Huckabee I was able to trade out of my position at Betfair.
Keep up the good work.
O/T - The Yougov/SNP Scottish Poll full data is on the Yougov website . The Westminster voting intentions are included Lab 32 SNP 32 Con 19 LibDem 12 Others 4 . Baxter’s Scottish section gives with these figures a seat prediction of Lab 34 SNP 13 LibDem 8 Con 4 . The voting intentions are also broken down by region but with usual caveats for the small subsamples . For example it purports to show Labour in the lead in the Highlands/Islands region .
Congrats again Mike.
Mark what are the +/- on those Westminster figures?
Mark if those seat projections are anywhere near correct, doesn’t PR become essential for Westminster elections - The Tories have 50% greater vote share than the Lib Dems but only half the number of seats!
Well done re the FT Mike
One thing Ms Tieman did get right - polical betting in this country is still in its infancy. Incredibly, to date, six times more money has been wagered with Betfair on The BBC’s SPOTY on Sunday evening than on the LibDem Leadership contest!
17 Test , vote shares at last GE were roughly Lab 39 SNP 18 Con 16 LibDem 22
18 I doubt whether the seat projections are near correct , it is Baxter and probably overstates the Conservative seat share ‘
Leaving work now off the web till I get home .
Surely one cannot “bet” on SPOTY - it is more akin to buying a raffle ticket.
21 Augustus - well approx £770K to date says you can, even though the outcome is a foregone conclusion.
16 and 20 thanks Mark
The change on GE vote shares are
Lab -7 (32) SNP +14 (32) Con +3 (19) LibDem -10 (12)
Interesting that the former Scottish govt parties suffer large falls and the LDs the biggest proportional fall of all.
At 32 the SNP are below the RodCrosby tipping point of 33.
9,14 etc.
Can someone explain?! It is a comlete mystery to me what any of thsi means.
Also, if there are only 1500 people who do this, how many copies of the book can mike be selling? I thought it was more than a few hundred…?
I liked the modest stakes-£100 seat line. I wish.
25. It’s modest in FT land Steven!!!
Mike, many congrats.
How come the LDs do not want to discuss in great detail yesterday’s by elections?
28. Erm, ’cause we were +-0 for the by-elections?! What is there to talk about (apart from the fact we were up 0.7% overall!?)?
Congratulations Mike!
Yes many congratulations, Mike.
StJohn is right that more political punters can only help our cause. The downside is that the market makers get smarter, but we can live with that for a bit.
Well done!
Because we don’t seem to have done very well in them. 22.8% of the vote is not good enough, though better than Labour 19.7%.
Congratulations to Mike.
28: They’re preparing for Government?
re 16 applying a Wells’ type UNS to these figures rather than a BAxter proportional one you get very similar results.
Lab 35
SNP 11
LD 9
C 4
SNP gains
Aberdeen N, Dundee W, Kilmarnock, Ochil (all from Lab), Argyll & Bute (from LD)
Tory gains
Berwickshire (from LD), Dumfies and Galloway (from Lab), Edinburgh S (from Lab)
and as Rod says increasing the SNP by 1 and decreasing Lab by 1 would give the SNP 5 more seats.
Re 34, Chris A, “and as Rod says increasing the SNP by 1 and decreasing Lab by 1 would give the SNP 5 more seats.”
that is some tipping point.
28 Just home from work , waiting for Sean Fear’s thread to discuss the council byelections .
Is it the performance of the Richmond LD Council that created the 5% swing from LD to C in Richmond Barnes by election yesterday, in a seat that the Conservatives were defending? Or was it something else?
C 1643 56%
LD 1103 38%
LAB 91 3%
Greens 87 3%
2,924
28/36 That’s right HF/MarkS - PB throbs with anticipation this time of a Friday nite. CAn’t u feel the tension?
28/37 - the only contest of any interest to the Lib Dems was in effect Barnes, which was a pretty poor result. Clearly if repeated in a general election it would indicate Mr Goldsmith has a good chance of moving from Devon to Westminster, but the election is a long way off and much water will run under the bridge(s) before then etc…
The poll might also break a record if repeated in a GE as it would give for Stirling
Lab 28.5%
C 28.3%
SNP 26.9%
LD 10.1%
I can’t remember what the smallest winning percentage was.
Re: Barnes by election
The LDs selected a well known former councillor as their candidate who had lived there 12 yrs. The election was caused by the Conservative cllr standing down due to work commitments. This reason often upsets voters. Yet the Conservatives gained a swing of 5%.
Just noted the alliterative title of the previous thread. Wasn’t Limiting Liberty the girlfriend of Calamity Clegg?
http://news.bbc.co.uk/1/hi/scotland/7132893.stm
40. Try Sir Russell Johnson in Inverness East, in late 80s early 90s?
On the last thread on Liberty, the Indy may well say that, but its readership is around 2% of the newspaper market. It’s not going to carry much weight with the government, who will be much more interested in the Sun, Mirror, Times, and Express, whose circulation is large and whose party allegiance or judgment on a particular issue aren’t predictable.
38 28/36 Peter the Punter “That’s right HF/MarkS - PB throbs with anticipation this time of a Friday nite. CAn’t u feel the tension?”
I can feel the luuuve!
44 - 1992 Inverness, Nairn and Lochaber
Liberal Democrat Sir David Russell Johnston 13,258 26.0
Labour David John Stewart 12,800 25.2
Scottish National Party Fergus Stewart Ewing 12,562 24.7 Conservative J. Scott 11,517 22.6
Green J. Martin 766 1.5
http://en.wikipedia.org/wiki/Inverness,_Nairn_and_Lochaber_(UK_Parliament_constituency)
INVERNESS, NAIRN AND LOCHABER
Result 1992:
Sir D.R. Johnston L Dem 13,258 26.0
D.J. Stewart Lab 12,800 25.2
F.S. Ewing SNP 12,562 24.7
J. Scott Con 11,517 22.6
J. Martin Green 766* 1.5
Lib maj. 458 0.8
13. Yes, John McCain has clearly a level of ethics far above anyone else in the Republican field. The fact that Republicans would rather back someone like Giuliani shows the lack of principles in their base. Well, I guess after Iraq, Valerie Plame, Scooter Libby, Karl Rove, New Orleans, Jack Abramoff, Alberto Gonzalez, drilling in Alaska, Gitmo, extraodinary rendition, secret flights etc, anyone with any principles at all has disowned the party.
re 42, Stjohn, “Just noted the alliterative title of the previous thread. Wasn’t Limiting Liberty the girlfriend of Calamity Clegg?”
40. The poll would also show Labour winning Edinburgh North & Leith with 27.3%, and the Tories Edinburgh South also on 27.3%.
The lowest winning share at a Westminster election was 26.0 at Inverness (Lib) in 1992.
I suspect the lowest winning share at the next election will indeed be in either of the Edinburgh seats mentioned. Both are on paper 4-way marginals.
Re: the SNP vote. Because it is so evenly spread the party moves from winning almost nothing at 32% to almost everything at 39%…. quite a narrow rang.
I suspect the LDs would do a bit better than UNS suggests. The swing shows the Tories very narrowly winning Roxburgh & Berwickshire by about 350 votes, which I think is unlikely. While Argyll & Bute is vulnerable, the LDs have a reasonable chance of holding Dunfermline & West Fife. So 10 or 11 holds looks more likely than 9 for them, and they also look best placed to snatch victory in Aberdeen South and Edinburgh South. I doubt they would come out of the election with a net seat loss. A similar fall in their vote share occurred 1983-92, yet they ended one seat up!
In Richmond Lib Dems have 36 councillors to the Conservatives 18. The incumbent council would expect to be blamed for the increase in council tax, the traffic, the weather etc.
All in all probably not too bad.
O/T - The Fallon/Race Fixing trial at the Old Bailey has collapsed and all the defendants have been acquitted.
I shall refrain from comment on the grounds that a) it’s probably of no interest to more than a very few here and b) I’m not altogether sure what my legal position would be.
re 45 with regards to the Indy there’s this piece of additional Labour sleaze in today’s. That sort of thing has been fairly common round here for ages.
Re 54, Peter the Punter “I shall refrain from comment on the grounds that a) it’s probably of no interest to more than a very few here and b) I’m not altogether sure what my legal position would be.”
you could email me.
re 54 PtP I’m amazed that no-one’s mentioned it before now.
PtP. Iam just going to email you with a question. Can you look out for it.
54 Never mind all that, Peter - the question we want answered is whether you had a successful bet on the result!
56 It would be a very long email, Benedict.
Why don’t you ring me? It might be easier and safer to talk.
60 Well I certainly thought about it, Chris, but I really wasn’t sure how much one could legally say about an ongoing trial.
Sorry…that’s Chris A at 57. Dysnumberic.
re 61 I meant since the collapse which was IIRC announced on the lunchtime news.
54. - Indeed PtP, the Courts have spoken and who are we mere mortals to question them!
63 Oh, right. I only just heard. Been busy…betting.
It’s easy I think, Chris, to overestimate the number of punters who post on this Site. A lot are purely interested in politics.
(And then of course there those who come here just to slag off Roger!
)
re 52 indeed. The Scottish FPTP voting intention of Lab 29 / SNP 40 if repeated in a GE would result in
SNP 36
Lab 14
LD 8
C 1
65 - the case was a farce, but that doesn’t mean racing can sweep everything under the carpet (although it probably will).
re 65 and some of us in both!
67 Wasn’t it, Aaron. The sheer incompetence of the inquiry was staggering.
52 - there is almost no chance of either the Tories or SNP picking up Edinburgh South.
I would have thought that the vats majority of the SNP increase (and Lib Dem decrease) is people expressing a desire to kick Labour - rather than any positive vote for the Nats. If so then they will inevitable shop around for the best placed candidate in their patch to unseat Labour next time. Which would clearly be the Lib Dems in Edinburgh South and North & Leith and probably in places like East Lothian and Midlothian too.
Re 60. Peter I will do that, but later if I may.
71 Whenever, but be prepared for a stream of expletives.
And don’t bloody record it!
Congratulations Mike. Quite a write up. A few more like that and your Grandchildren will be a shoo-in for the Bullindon Club!
I heard from a friend that Fallon was a very lucky boy. Though having just listened to the news it seems that the prosecution was claiming he was paid to lose races that he won! Even George Carmen would struggle with that I’d guess!
For those interested in an early Oscar and Golden Globe tip-’best cinematography’ to Roger Deakins for “The Assassination of Jesse James…” Remember you heard it here before all the competing films have been shown!
72 PtP I think we’ve been able to glean the general thrust of your opinion of the trial, without your actually saying very much at all. It has to be worth paying £25 to attend the PB.com party just to hear the full unexpurgated version!
Re 72, Peter “71 Whenever, but be prepared for a stream of expletives.
And don’t bloody record it!
”