Betting on politics: when to sit on your hands

published 28 February 2019

936-leave-634 — Sometimes it's better to watch from the sidelines

The market on whether Britain will leave the European Union on29 March is currently Betfair's biggest, with £2.9m already wagered. Until the end of lastyear punters were predicting that we would leave as planned, but Prime Minister Theresa May's suggestion that MPs will get an opportunity to vote on whether to extend Article 50 has meant that the chances of a 29 March exit have drifted out even further to 6.2 (16.1%).

By contrast, the odds of the UK not leaving on the expected date are now as tight as 1.18 (84.7%). It's clear that the prime minister facesan uphill struggle to get her deal through Parliament, and she may have to get a short-term extension anyway in order to get through the huge amount of additional legislation that needs to be passed.

However, there is always a chance that she could win enough concessions to allow the ERG group of Brexiteers and the DUP to back her and there are a few opposition MPs who are expected to back her, too. It's important to remember that just before polls closed the betting markets were similarly certain of a Remain victory.

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To be clear, I think that May's deal will indeed be voted down, and the Article 50 deadline extended. However, I don't think the odds are attractive enough to justify abet either way. It's always tempting to want to bet on a big event, but if you want to be a successful bettor, then sometimes you have to sit on your hands and look elsewhere.

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