Thursday, 16 April 2015

The Conservative battleground in April 2015

Yesterday I looked at the constituency betting markets as they currently stand from a Labour perspective.  Today I'm looking at the Conservatives.  So here's the table of all the seats (as at 14 April) where the Conservatives' chances are ranked by the bookies between 1/16 and 16/1, ranked in ascending order of implied probability:

As I explained yesterday, such a table assumes that in aggregate the constituency odds are our best estimate of what's going on, while noting that there may be individual anomalies (otherwise known as betting opportunities).  The constituency odds factor those matters in to the best judgement of bookies and punters. By arranging constituencies by order of odds rather than majority, we can see how many seats gamblers expect the parties to take - or what the odds are that each party will take a given number of seats.

Here are the milestone seats with the seat counts implied if the Conservatives take every seat in order of probability up that point:

350 Clacton (7/1)
340 Birmingham Edgbaston (5/1)
330 Thornbury & Yate (7/2)
326 Plymouth Sutton & Devonport (7/2)
320 North Warwickshire (3/1)
310 Weaver Vale (5/2)
300 Hastings & Rye (2/1)
290 Morecambe & Lunesdale (6/4)
280 Cheadle (6/5)
270 Great Yarmouth (5/6)
260 Rossendale & Darwen (4/6)
250 Elmet & Rothwell (4/7)
240 South Basildon & East Thurrock (8/15)
230 North Thanet (2/5)
220 Folkestone & Hythe (3/10)
210 Maidstone & The Weald (1/4)
200 Burton (1/6)

5/6, the price on the Conservatives for Great Yarmouth, is sometimes referred to as the bookies' evens (reflecting their need to build in a margin to make a profit), so it seems that the current central implied expected point for the Conservatives is around 270 seats. 

For an overall majority, the Conservatives would need 326 seats.  The 326th seat is Plymouth Sutton & Devonport, for which the Conservatives are priced at 7/2.   As of this morning, you can get just under 9/1 with Betfair on the proposition that the Conservatives will get an overall majority, with good liquidity above 8/1.  The seat markets are by and large for the birds in this vicinity.  I would not consider backing the Conservatives in any seat at these odds without the most outstanding intelligence that the Conservatives were doing far better in the seat than was widely understood. If you think that the Conservatives stand an earthly chance of an overall majority, back that proposition directly on Betfair.
As I noted yesterday in relation to Labour, it's less clear how many seats would be required for either main party to have most seats.  Both parties are priced in the constituency markets at 5/6 to get their 270th seat.  Yet Labour are 15/8 on Betfair to get most seats while the Conservatives are 8/15.  These two markets are completely detached from each other.

It follows that there is an indirect hedging strategy, which is to back Labour on the most seats market and to back the Conservatives in the seats which they would need to take from Labour if they were to get around 270 seats.  Such seats would include Worcester, Blackpool North & Cleveleys, Pudsey and Ipswich, for example.  If you back a suitable selection according to taste, you would be unlucky to come out behind and if you were  lucky (or skilful in choosing your Conservative bets) you might win on both sides of some of the bets.
Another important milestone seat is Eastbourne (7/4), which is the 295th seat.  This probably represents the practical minimum for the formation of a Conservative government, with David Cameron as Prime Minister.  Yet you can still lay David Cameron on Betfair at odds on to be Prime Minister after the next election.  Another indirect hedging strategy is to do just that and to back the Conservatives in seats like Stroud, Eastbourne, Cannock Chase and Carlisle.  Get the right seats and you might again come out ahead on both sides of the bet.

Obviously for both of these strategies there is the risk of losing on both sides of the bets.  But that would be seriously unlucky (or you would have chosen poorly when you picked the seats in which you had backed the Conservatives).

If you want to play things more simply, just lay David Cameron for next Prime Minister, which is what I have done.  He should be at least 7/4 for that proposition if the constituency markets are to be believed. To be able to lay him at odds against is incredible value.

Or, if you disagree and think that the Conservatives are going to get most seats, look in the 270 to 310 band of seats.  If you are right, this is where you will find the best value on the constituency markets. 

I already have a book of Conservative relative longshot bets from the last year, and now I'm looking at the value at the other end of the scale.  Redditch at 2/7, Sittingbourne & Sheppey at 3/10 and Crawley at 3/10 all look safe enough to me, and I've backed the Conservatives in all of these.  I'm not expecting the Lib Dems to come close in places like Maidstone & The Weald either, despite rumours of private Lib Dem polling showing them doing well: 1/4 looks like a good price here too.

No comments: