Archive for Betting Exchange

Meaningful Betting

Posted in Biographical, mathematics, Politics with tags , , , , on January 15, 2019 by telescoper

I’ve now finished my first batch of marking (Astrophysics & Cosmology) and I now have a few days to do other things until the next (larger) set of scripts arrives from Vector Calculus and Fourier Series which takes place on Saturday.

Before going home I turned my attention to the news of tonight’s “Meaningful Vote” in the House of Common’s about whether or not to accept the Withdrawal Agreement negotiated between PM Theresa May and the European Union. The Government is widely expected to lose the vote but it’s not clear by what margin. Interested to see what the betting markets think I had a look just now at the Betfair exchange and found this, on the basic question of whether the vote will pass or not:

(You might want to click on the image to make it clearer.) You can find the live odds here.

You will see that this is quite an active market – with over €700K being wagered. Odds of greater than 40 to 1 against a `yes’ vote but most of the action is on `no’. Note that quite a few punters are laying on this outcome, with odds of about 25-1 on. (The way odds are shown in the second row is that 1.04 means you with 4p for every £1 staked).

Clearly, therefore, the markets think the vote will fail. What is less clear is how many MPs will vote in favour of the Government. Here is the corresponding Betfair market:

The shortest odds are for the first option, i.e. for 199 or fewer voting with the Government, but there is activity across the whole range of possibilities. The press are talking about a defeat by 225 votes, but for what it’s worth I don’t think it will be such a large margin. I’m not going to bet on it, but I expect it to be defeated by less than 150 votes.

UPDATE: Not for the first time I was wrong. The vote was Ayes 202 Noes 432, a majority of 230 against. That means there were no abstentions.

Betting on the Supreme Court

Posted in mathematics with tags , , , , , , , on December 6, 2016 by telescoper

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.