Betting on politics: Australia catches out the bookies

published 24 May 2019

948-Tony-Smith-634 — Liberal Tony Smith still managed to win on second preferences

Saturday's election in Australia proved embarrassing for bookmaker Sportsbet, which not only sustained huge losses on winning bets on the Liberal-National coalition, but also incorrectly paid out on a Labor victory two days early. Overall, it is reported to have losta total of A$5.3m.

By contrast, thetwo handicap betsI recommended, at 1.11 on Betfair and 4/6 on Bet365, both paid off, as did my recommended bets on the coalition candidates in Aston (Victoria) at 1/6, Kooyong (Victoria) at 1/5 and Casey (Victoria) at 2/5, as well as in Hughes (New South Wales) at 1/5.

Indeed, not only did the coalition win in each of those constituencies, but the Liberal candidates managed to increase their share of the vote in Aston and Hughes. Even in Casey, the closest of thefour contests, Liberal Tony Smith still managed to win on second preferences by a margin of just under 9%. Admittedly, since the bets were at short odds, they didn't make a huge amount of money, but a return of 29% is still pretty decent.

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Given that the Australian polling companies came infor a tremendous amount of criticism in the aftermath of Morrison's victory, it may seem strange that one of the lessons from this election from a betting perspective is to pay attention to opinion polls. If you had looked at them closely you would have seen that Labor's lead narrowed aspolling day approach, and was never big enough to justify the landslide that some bookies and betting markets were predicting.

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