Betting on politics: Denmark's general election

One of the major forthcoming European elections next year is the general election in Denmark, which will have to be held by 17 June. At the moment most people expect the Social Democrats to do well, and Paddy Power has them as clear favourites to win most seats, at 1/5 (83.3%).

It also thinks that the current prime minister, Lars Lkke Rasmussen of the Danish Liberal Party, is the odds-on favourite to win, and it is quoting1/3 (75%) on him staying in power.

Despite the short odds, I think you should take the bet on the Social Democrats getting the most seats. Since Denmark uses a form of proportional representation, the party that gets the most votes nationally will also get the largest number of seats. Over the past few years the opinion polls have been extremely stable, giving the Social Democrats consistent leads of 5%-10% over the other two parties, the far-right People's Party and the centre-right Liberals.

I'm sceptical about Rasmussen retaining power, however. With the three main parties getting only two-thirds of the seats, it will all hinge on the performance of the minor parties in each bloc. At the moment polling suggests that the various left wing and left-of-centre parties are on course to get a majority of votes. While the gap between the left and right-wing blocs is only a few percentage points, the chances of him retaining power should be less than 50%, which suggests that Paddy Power's quoted odds look poor value.