Betting on politics: Were Rangers relegated?

Matthew Partridge explains why, when it comes to placing your bets, it always pays to read the small print.

Dr Matthew Partridge
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published
in Features

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Did Rangers become a separate entity?
(Image credit: 2011 Getty Images)

There's an interesting case going through the Scottish courts just now. In 2011 bookie Albert Kinloch bet £100 at 2,500/1 on Rangers football club being relegated from the top Scottish division. The club subsequently went bust and was kicked down to the third division. Kinloch claimed his winnings. However, Coral, which took the original bet, refused to pay up, arguing that they were demoted, rather than relegated, and that, since the original company was wound up by the courts, the new club is technically a separate entity. While this may seem pedantic, Coral stands to lose £250,000 if the judgement goes against the company.

The political betting world isn't immune to such controversies. In 2007 Tradesports (now defunct) refused to pay out on bets on North Korea carrying out a nuclear test. Although widely reported in the media, Tradesports argued that the rules specified that the test had to be confirmed by the US State Department. To be fair, unlike Coral, Tradesports was an exchange so it didn't get any direct benefit from the decision. Indeed, it could credibly argue that settling the bet in the other direction would have been unfair to punters on the other side of the bet.

This could be pertinent to terms of the various Donald Trump markets. Most bookies offer some bet on the new president being impeached, resigning, leaving office or simply not serving his full term. But there are subtle differences between each outcome. Contrary to popular myth, Richard Nixon resigned before the Articles of Impeachment were brought to a vote by either part of Congress.

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Conversely, Clinton was technically "impeached" by the House of Representatives, before being acquitted by the Senate. There's also the outside possibility that something could happen to the 70-year-old Trump. So read the fine print on any bet (Betfair posts its rules alongside every market).

Dr Matthew Partridge
Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri

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