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Betting on politics: a no-confidence vote

Matthew Partridge tips a very rare arbitrage opportunity to snap up now.

904-May-634
Will a no-confidence vote be called?

Donald Trump's pick for the Supreme Court was bad news for this column, which advised you to back Amul Thapar, Joan Larsen and Allison Eid. We chalk up a loss on that bet and turn to the UK, where there are oddly few ways to play what could be the final stages of Theresa May's time in office. The resignations of Boris Johnson and David Davis have convinced Ladbrokes to ditch its popular market on the next minister to leave the cabinet, but there are still options to bet on May's leaving date.

On the exchanges, Betfair has 2.44 (40.9%) on her quitting this year, 2.66 (37.5%) on her departing in 2019, 8.6 (11.6%) on her going in 2020, 13 (7.7%) in 2021 and 7.6 (13.2%) in 2022 or later. But this works out at combined odds of 78.4%, which is close to what I'd estimate as the 80%-85% odds of her quitting by the end of 2019, so I would have to recommend that you look elsewhere.

Interestingly, both Smarkets and Ladbrokes offer sharply differing markets on whether a vote of no confidence against the prime minister will be called in July. While Ladbrokes is offering 2/1 (33.3%) on a no-confidence vote being called, Smarkets is offering 2.92 (34.2%) on a vote not being called.

This means that you could make money by simultaneously putting money with Ladbrokes on "yes" and Smarkets on "no" for combined odds of (67.7%). Such arbitrage opportunities are very rare, so I'd advise you to grab this one fast, by putting £5.07 on "no" for Smarkets and £4.93 on "yes" for Ladbrokes.

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