Betting on politics: Italy's election

With the Italian election coming up at the start of March, Matthew Partridge looks at who the bookies expect to win.

Dr Matthew Partridge
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Can Luigi Di Maio's Five Star Movement pull off an election victory?
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Italy's general election takes place on 4 March. Which party will win most seats in the Chamber of Deputies, the lower house of parliament, and who will emerge as the country's next prime minister?

Polls suggest the populist Five Star Movement (M5S) will receive around 27% of the vote, compared to 22% for the incumbent centre-left Democratic Party (PD). Former prime minister Silvio Berlusconi's centre-right Forza Italia (FI) and one of his potential coalition partners, the Lega Nord (LN), are each heading for around 15%.

The betting markets think Five Star will win most seats, with betting exchange company Smarkets offering 1.27 (79%) on them. By contrast, you can get 5.7 (17.5%)on the PD and 23 (4.3%) on FI. I'm going to suggest that you bet on PD to come first though. This is because Italy is using a complicated voting system that combines elements of first-past-the-post and proportional representation.

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What's more, polls show that the PD's Paolo Gentiloni, the incumbent prime minister, has a much higher approval rating than anyone else, so the polls could be underestimating the PD's ratings.

Berlusconi says if his wider centre-right coalition fails to win a majority (this is very likely given they are collectively expected to get less than 40% of the vote), he could let Gentiloni continue as prime minister, at least for the time being.

The Italian establishment is strongly in favour of Gentiloni staying on, so you should make an additional wager on Betfair on both Gentilioni and Antoni Tajani (Berlusconi's preferred choice) being the next prime minister at 3.45 (28.9%) and 3.1 (32.2%), respectively. This works out to combined odds of 61.2%. Break a £10 betting unit into £4.73 on Gentilioni and £5.26 on Tajani.

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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