Betting on politics: steamers versus drifters

One of the biggest debates in betting is over the merits of "steamers" versus "drifters". Steamers are bets that dramatically shorten in price: so the implied chances of success go up. Drifters are the reverse, bets where the odds drift out, suggesting that a result or event has become less likely. So if a candidate's odds go from 2/1 (33%) to evens (50%), the bet is a steamer; if the odds move in the opposite direction, it's a drifter.

Those who advocate backing steamers argue that most bookies are unable to monitor each individual market. Instead, they tend to rely on the direction of money to guide their odds.While this is designed to protect them from large losses, it means that they are always one step behind the best bettors. In many markets people gamble with information not available to the general public. If there is a rapid movement it makes sense to follow these insiders.

Supporters of drifters agree that this may have been true long ago. But today, the belief that steamers offer value means that many people blindly follow them, betting on them even when the odds are too short. They also argue that people tend to let their emotions run away with them, overreacting to every piece of bad news. They insist that there is better value to be had by betting on drifters.

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So who's right? All the studies suggest that if you're looking to hold a bet until the event takes place, you're far better off going with the drifters. A 2015 study by Tobias Moskowitz of the University of Chicago that looked at Las Vegas bookmakers for baseball, American football, hockey and basketball, found that betting on outcomes where the odds had shortened would have increased your losses. Studies of horse racing by both Betfair and Racing Post also suggest that backing drifters can make you money.