Bookie Odds Favor a Clinton Win, But they Also Predicted Brexit Wouldn’t Happen
Trump currently has similar bookie odds to what Brexit did just before the vote.
Hillary Clinton speaks during a rally, in March 2016. Image: Wikipedia
Now that Donald Trump has officially accepted the Republican Party's nomination, the possibility of a former reality TV host becoming president is more real than ever before. While recent polls range from predicting Hillary Clinton has a 75 percent chance at clinching the election to putting her neck-and-neck with Trump, bookie odds are more consistent, giving Clinton a notable edge over the GOP nominee.
But while, in the past, betting odds have tended to draw similar conclusions to public opinion polls—even when they get it wrong—the Brexit vote shook up that tradition. Prior to the vote, opinion polls in the United Kingdom showed a tight race between the "yes" side (people who wanted to leave the European Union) and those who wished to "remain," but bookies stubbornly stuck with the latter.
The bookies were wrong. Considering Trump currently has similar bookie odds to what Brexit did just before the vote, it raises the question of what the bets might actually be forecasting.
Bookie odds are influenced by the amount of money placed on a particular outcome, and right now, betting sites around the world put Clinton in the lead. A quick scan of a handful of betting sites had Clinton's odds ranging from 2-5 to 4-9, which boils down to an average of about 64 percent chance of winning. Trump's odds range from 2-1 to 15-8, putting his odds somewhere between 30 and 36 percent.
These odds are similar to what bookies were placing ahead of last month's UK referendum on whether or not to leave the EU. In the last few weeks before the vote, polls were showing an airtight race, with a slight edge towards leaving. Yet bookies were giving odds of 4-7 that the UK would stay, predicting Brexit had just a 36 percent chance of happening.
After the Brexit vote (reminder: 51.9 percent of voters in the UK cast a "leave" ballot), Matthew Shaddick, the head of political betting at betting site Ladbrokes, penned a blog post trying the explain what had happened. Shaddick pointed out that bookies have a completely different motivation for odds-making than, say, a newspaper poll.
"The truth is that bookies do not offer markets on political events to help people forecast the results," Shaddick wrote. "We do it to turn a profit (or at least not lose too much) and in that respect, this vote worked out very well for us."
Still, betting odds have successfully predicted outcomes many times in the past, even in political races. Bookies gave President Obama 1-5 odds of winning the 2012 election, for example. And while some polls wavered somewhat ahead of the Scottish referendum, bookies consistently favored a stay vote.
The fact is that bookie odds will always be affected by public opinion polls: Bettors place calculated bets based on all of the information at their disposal, including polls. Still, the similarities between Brexit and Trump's campaign have been noted before. The fact that bookies have similar odds on Trump as they did for a Brexit isn't something that should be disregarded, even if the betting sites have Clinton in the lead.