Wednesday, 15 April 2015

The Labour battleground in April 2015

Over the months I have looked a few times at the individual constituency betting odds on party lines, ranking the seats in order of the odds on a given party taking that seat.  I last did this in a comprehensive manner in October/November last year.  Over the next week or so, I shall be giving my final pre-election look at the seat markets.

The idea behind this is not immediately obvious to everyone, so new readers may want to start here:

The central point from that post is that 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 (more commonly known as betting opportunities). It also makes the heroic assumption that the individual constituency odds - for Labour and the Conservatives at least - are perfectly correlated contingencies (which of course they are not) to establish a handy tool for judging the chances of success for each of the main parties overall. The general idea is that looking exclusively at marginality takes insufficient account of the different nature of the seats (who's second, is there a relevant third player, where is the seat). 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.

So, here's the table as of this morning:

I've included every seat where Labour are priced between 1/16 and 16/1.  These prices are up to date so far as possible (subject to the inevitable transcription errors etc) as of first thing this morning.  

Here are the seat tallies that would be implied by taking these milestone seats:

210 Cardiff North (2/9)
220 Enfield North (2/7)
230 Plymouth Sutton & Devonport (4/11)
240 Hove (4/9)
250 Bury North (4/7)
260 Ayrshire Central (8/11)
270 Harrow East (5/6)
280 Lanark & Hamilton East (6/5)
290 Stevenage (5/4)
300 Glasgow Central (13/8)
310 Blackpool North & Cleveleys (7/4)
320 Rossendale & Darwen (2/1)
326 Aberconwy (9/4)

I last looked at the Labour position in October here:

What has changed?  In the intervening months, the markets have become much more competitive.  We have many new entrants to the seats markets, with at least 14 different firms quoting on some or all of the different constituencies.  Prices have generally improved in aggregate and there are numerous seats where there is a practical underround (those who wish to seek out low risk double bets may wish to study these lists carefully).  A slight deterioration in the best price for a party may signify nothing more than a new entrant to the market.

But the glacier of safe Scottish Labour seats has melted.  All 41 Scottish Labour seats are far less safe than they were in October.  Some seats that were so safe in October that they were not even listed then are now odds against for Labour.  This has made Labour's task much harder.

Otherwise, the seat markets have moved predominantly in response to constituency polls (and then often not by as much as one might have expected).

Anyway, back to the present day.  5/6, the price on Labour for Harrow East, 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 expected point for Labour is between 265 and 270. 

For an overall majority, Labour would need 326 seats.  The 326th seat is Aberconwy, for which Labour are priced at 9/4.   As of this morning, you can get 41/1 with Betfair (with good volumes of money at 33/1) on the proposition that Labour will get an overall majority. 

That means one of two things.  Either the bookies' prices on the constituencies are ridiculously mean or the impact of how Labour will perform in individual constituencies has not been properly factored into the overall markets.  The two are not mutually exclusive, of course.

It's less clear how many seats would be required for Labour to have most seats.  You can get 7/4 with Bet365 on Labour getting most seats and do slightly better even than that on Betfair.  You don't start getting prices in the individual constituency markets until you approach the 310 seat mark.  310 would definitely be enough for Labour to have most seats - indeed, 280 might well be enough.  So once again, the most seats market offers far better value than the individual constituency markets if you are looking to back Labour.

So if you want to back Labour, the simplest strategy by far must be to ignore the constituency markets and instead to back Labour in the most seats market (and, if you so wish, the overall majority market).  I've been following this strategy for some time.

However, it is now worth considering whether to place some short term low risk bets on Labour in their safer seats.  2/7 in Newcastle-under-Lyme and 1/5 in Ashfield (where the previous dynamic Lib Dem candidate had to stand down in the worst circumstances) both look good, with UKIP apparently fading in their more distant prospects if other polling is to be believed.  I'm on both.  I haven't detected a Plaid Cymru surge, so I'm backing Labour at 1/8 in Llanelli also.  The rates of return seem well worth the increased risk over bank rates to me.

Tomorrow I shall look at the markets from the Conservatives' perspective. 

1 comment:

Elson Cade said...
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