Tuesday, 14 October 2014

The cloud of unknowing: the seats with no clear favourite

To date, I've looked at the constituency betting markets thematically, whether by party or by region. In this post I shall look at the seats that the betting markets identify as close, and see what themes emerge from those. Here are the seats that have a favourite priced at 1/2 or longer:


I've included only those parties listed at 10/1 or lower. Longer shots may come home, of course, but for now I'm focusing on what the markets think is well within the bounds of possibility.

The first thing to note is that there aren't actually that many seats without a strong favourite. In all bar these 75 seats, the betting markets are tolerably clear about what punters see is the likely result. And indeed, 33 of these 75 have a favourite at 4/7 or longer. True toss-ups are few and far between. You can see why critics of First Past The Post think that it means that very few voters' votes matter.

(You could, of course, take the opposite view, that punters are showing too much certainty about the outcome of the election. I tend to this view. In many seats, the impact of UKIP's disruptive rise and the Lib Dems' disruptive fall seems harder to predict than is assumed. There are betting opportunities there as a consequence.)

Where are gamblers least certain of the outcome? Some themes are obvious. Wherever the Lib Dems are in contention, uncertainty follows. 26 of the 57 Lib Dem held seats are on this list - on a pro rata basis, you'd expect to see seven. No one really has all that much of a clue how the Lib Dems are going to do. 

Only 34 of the seats are seen as straight Conservative/Labour battles (all of them are Conservative held). Given how many more straight Conservative/Labour battles there are than Lib Dem held seats, this suggests that gamblers feel that they have much more of a handle on such seats.

Wherever UKIP appear, they sow confusion in punters' minds. 14 of the seats where they are listed at 10/1 or less appear on this list.  

Unsurprisingly, where three or more parties are in the mix, the seats are less predictable. All eight of the seats with a favourite at evens or longer have three or more parties in serious contention.

What's missing? Only three Labour seats feature. The only seat from the north east is Berwick-upon-Tweed (Lib Dem held, of course). Only five London seats feature. 11 Scottish seats are on the list, but nine of these are Lib Dem held.

How to approach betting on such seats? Cautiously, and the further down the list you go, the more cautious you should be. There's a reason why there's no odds-on favourite in Argyll & Bute: it's as clear as mud. I'm by inclination lazy and I prefer simple betting propositions to complicated ones. This list has a disproportionate number of complicated betting propositions. I'm happy to leave those to others.

It's important to sort between the two different types of uncertainty. There's chaotic uncertainty (wild seats) and then there's the uncertainty you get when you're at the centre of the swing of the pendulum. The Conservative/Labour battlegrounds are the latter, while the three and four way marginal are the former. Different strategies work for each.

In the wild seats, there can be money to be made if you think there's an anomaly that hasn't been properly corrected. With Mike Hancock stepping down in chaotic circumstances in Portsmouth South, it seems unlikely to me that there will be an orderly grooming of a Lib Dem successor candidate to inherit the substantial personal vote that he presumably built up over 30 years' involvement with the seat. The Lib Dems now have a new candidate in place, Gerard Vernon-Jackson, who was mayor of Portsmouth for 10 years and who has been personally close to Mike Hancock - he has made some eyebrow-raising remarks in support of Mike Hancock which will no doubt feature on other parties' electoral literature if he looks to be in contention next year. With the Lib Dems having slumped in the polls nationally, 8/11 seems considerably too short on the Lib Dems without either an incumbent or a succession plan. I'm unclear whether the Conservatives or UKIP will benefit most (my hunch is the Conservatives), but I don't need to choose: by backing both, I can get a better than evens shot that the Lib Dems will lose.

Conversely, UKIP's impact in some seats seems to have resulted in the odds on some favourites having lengthened too far. The Conservatives look a decent bet at 4/6 in both Camborne & Redruth and St Austell & Newquay. UKIP will be concentrating their resources on their best bets in the south east of England and to take a seat will need them to work their ground game especially well, making them longer shots than recent constituency polls might suggest. (As a general point, kippers seem to be enthusiastic gamblers, and since there are relatively few seats where they are in contention, the odds on UKIP often seem shorter than would be justified objectively.) I've made these bets, but I don't feel half as confident about them as I do about some others.

I've banged on about this on several occasions, but the Scottish Lib Dems in general are way too short priced. At their present levels of polling, they will not retain anything like 11 seats. That they are no worse than 4/1 in any of their Scottish seats (and worse than 6/4 in only two) is absurd. At present polling levels in Scotland, they would be delighted to retain half this number. I'm already on their opponents in many of these seats. The longer they go on without a polling revival, the better these bets look.

In those seats with no clear favourite because the pendulum has stopped there, we need to assess whether they have been rated correctly in their relative order. Ealing Central & Acton stands out as a good bet on Labour at 10/11: there's a large Lib Dem vote to squeeze and the excellent local results for Labour in London this year suggest that Labour will outperform here. The 4/6 on the Conservatives in Bristol North West looks very kind, given that second favourites Labour would need to take the seat from third - something that has happened five times in total in mainland Britain in the last three general elections.

But the most valuable aspect of this table is to remind me to be careful. When others aren't confident that they know what's going on, I should not assume that I have any special insight.

No comments: