Betting on the Supreme Court

This week the UK Supreme Court is hearing an appeal by HM Government against the judgment recently delivered by the High Court which was that the UK Government must seek the approval of Parliament before it can invoke Article 50 of the Lisbon Treaty and thus begin the process of leaving the European Union. You can watch the proceedings live here. I had a brief look myself this morning but as I’m not a legal expert I found it rather hard to follow as it’s rather technical stuff. That wasn’t helped by the rather dull delivery of James Eade QC who was presenting the government’s case. Nevertheless, it is a very good thing that we can see how the law work in practice. I was surprised at the lack of gowns and wigs!

Although Eade seemed (to me) be on a very sticky wicket for some of the time, it’s impossible for me to come to any informed inference about who’s likely to win. Out of interest, to see what other people think, I therefore had a quick look at the betting markets. Traditional bookmakers (such as William Hill) are offering 1-3 (i.e. 3-1 ON) for the original decision being upheld so they’re clearly expecting the appeal to fail.

These days, however, I’ve started to get interested in other kinds of betting markets, especially the BetFair Exchange. This allows customers to act as bookmakers as well as punters by offering the option to “lay” and/or  “back” various possible bets. “Laying” betting means effectively acting as a bookie, proposing odds on a particular outcome. i.e. selling a bet.  “Backing” a bet means buying a bet. The exchange then advertises this to prospective bettors who sign up of they are prepared to stake money on that particular outcome at those particular odds. It’s very similar in concept to other trading services, e.g. share dealing. Matches aren’t always made of course, so not every bet that’s offered gets accepted. If that happens you can try again with more generous odds.

The advantage of this type of betting is that it represents an “efficient market”. Such a market occurs when all the money going into the market equals all the money being paid out in the market – there is no leakage or profits being taken. Efficient betting markets rarely exist outside of betting exchanges – bookmakers need to reap a profit in order to run a business. For example, though William Hill is offering 1-3 on the Supreme Court ruling being upheld, the odds they offer against this outcome are 12-5. These are not “true odds” in the sense that they can’t represent a consistent pair of probabilities of the two outcomes (as they don’t add up to one). In the case of an exchange market a bet laid at 1-3 is automatically backed at 3-1. These can then be regarded as “true odds”.

This is what the BetFair Exchange on the Supreme Court hearing looks like at the moment (you might want to click on the image to make it clearer):

 

supreme-court

The odds are given in a slightly funny way, giving the gross return for a unit stake (including the stake). In more normal language “4.3” would be 100-30, i.e. a £1 bet gets you £3.33 plus your £1 back. A bet on “overrule” at “4” (3-1) corresponds to a bet against “uphold” at 1.33 (1-3), reflecting what I was saying about “true odds”.

The first thing that struck me is the figure at the top right: £38,427. This is the value of all bets matched in this market. By BetFair standards this is very low. A typical Premiership football match will involve bets at least ten times as big as this. As in the court case itself there just isn’t very much action!

Apart from that you can see that the odds here are broadly similar with William Hill etc with implied odds around 3-1 to 4-1 against overruling.

Before you ask, I’m not going to bet on this myself. My betting strategy usually involves betting on the outcome I don’t want to happen. Although I think Parliament should be involved in Article 50 I am just happy that this matter should be left to our independent judiciary to decide.

16 Responses to “Betting on the Supreme Court”

  1. Anton Garrett Says:

    I’ve been thinking about the constitutional aspects of this, and trying to keep them separate from my personal views on Brexit. I’m not convinced that the judiciary should decide a political issue. It is really a spat between the Cabinet and the Houses of Parliament, ie it is a matter internal to the Palace of Westminster.

    There is someone who might usefully decide such an issue: the Crown.

    • Who should decide such a spat?

      The Crown? Is that possible? Some modern European monarchs have no real power, only ceremonial, some have a bit, some have quite a bit (though those in the last two categories rarely if ever use it). What is the legal situation in the UK (assuming there is one; it might be based just on precedent, what the Law Lords think, whatever).

      Of course, it is a judicial issue if it involves the interpretation of law. Of course, this can also be political, but many judicial decisions have political overtones.

    • telescoper Says:

      I disagree with Anton. It’s a matter of constitutional law which should be decided by the courts. Neither the executive nor parliament nor the Crown should be permitted to act unlawfully.

      For Article 50 itself this case had little significance because any motion or Act of Parliament would in all probability be carried. However it has enormous implications for subsequent attempts by the government to remove from British citizens rights accrued through membership of the EU. If the appeal fails then each of these will have to be debated in Parliament rather than by executive order.

    • telescoper Says:

      Anton, in the very opening stages of this hearing the Supreme Court asked both sides if they were content for this matter to be resolved by this hearing. Both said “yes”. Both sides were then asked whether any party wished any of the 11 judges to stand down. The answer, again from both sides, was “no”.

      • Anton Garrett Says:

        This Supreme Court hearing is an appeal against an earlier decision in a lower court. I doubt that both sides gave or would have given the same answers in that original hearing.

        My question remains: What has a spat between Parliament and Cabinet, ie a difference of opinion within the Palace of Westminster, to do with the judiciary?

      • telescoper Says:

        The same question was asked in the High Court and both sides gave the same answer.

      • telescoper Says:

        It is not a spat between Parliament and Cabinet. The case was raised by private individuals against a government that it felt was planning to act unlawfully.

      • Anton Garrett Says:

        Yes, I should have put it like this: What has a question about the balance of power between Cabinet and Houses of Parliament to do with the judiciary? I see no reason why they should be the ones to decide it.

      • telescoper Says:

        It’s a matter of constitutional law.

      • Anton Garrett Says:

        It’s a constitutional matter alright, but I don’t see that judges have the last word on such things

      • telescoper Says:

        There is of course the possibility that it might be referred to the European Court of Justice…😀

    • Joseph Conlon Says:

      The issue though, is the extent of the power of the Crown (in practice her ministers), which is a matter par excellence for constitutional law.

      It is not in dispute that the Crown can do all kinds of momentous things without any reference to parliament (for example, declaring war).

      It is not in dispute that (A) the Crown can enter and withdraw from foreign treaties without any reference to parliament and (B) the Crown cannot undo or overrule parliamentary legislation.

      The government’s case is that triggering article 50 falls under (A); the case of Miller et al is that due to the 1972 European Communities Act it would fall under (B).

      There are serious arguments on both sides, but this seems a classic legal question that falls to the courts.

      [On a different matter, I agree with you that judges should not decide political issues. This may be a problem in eg human rights law but I think this is clearly a legal question rather than a political one]

      • You seem to be using “the Crown” in the modern sense as an abstraction of the state, in the form of “her ministers”. Anton suggested that the Crown resolve a dispute between Parliament and the Cabinet. Are you and Anton using “the Crown” in different senses, or are “her ministers” distinct from “Cabinet” (which also contains ministers)?

      • Joseph Conlon Says:

        Philip: I use the Crown in the strict sense of the monarch (Brenda). Legally, all kinds of powers reside in the monarch – which by convention she does not exercise personally. For example, any parliamentary bill is not law unless the monarch gives Royal Assent – which by convention she always does.

        Particularly relevant for Brexit is the fact that the monarch has the power of making and withdrawing from foreign treaties.

        Now, in the modern British state the executive powers of the Crown are all in practice exercised by her ministers.

        But this is why Anton’s suggestion doesn’t make sense – the dispute is between Parliament and the Crown, so the Crown can’t resolve it as a neutral mediator, as it is really a party to the case.

        [If it all sounds a bit archaic, it is not in substance that different though to e.g. recent arguments and legal challenges in the US over whether some of President Obama’s actions are an overreach of executive power – it’s an argument about the boundary between the legislative and executive functions]

      • “But this is why Anton’s suggestion doesn’t make sense – the dispute is between Parliament and the Crown, so the Crown can’t resolve it as a neutral mediator, as it is really a party to the case.”

        Right, which is why I thought that he was using it in a different sense (i.e. literally the Queen deciding this issue) or that “her ministers” must be different from “cabinet ministers”. But as you point out, Anton seems to be suggesting that one of the parties involved decides the dispute, which seems somewhat bizarre.

      • Anton Garrett Says:

        It seems to me obvious that the Queen should decide who exercises these powers on her behalf. If she actually appoints the judiciary to make such decisions then that would make sense.

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