Election Betting – Towards a Strategy

Some of our more observant regular readers will have noticed the new Election Gambling link at the top of our page. I and some of the other Third Estate bloggers will be putting money on the election and we’d also like to see where other bloggers are putting their money. I know that Reuben has already started some tipping here, but I thought I’d publish a slightly more comprehensive betting strategy.

Safe bets and speculative bets
Elections are rather predictable most of the time, and the most solid way to make a bit of cash is on safe bets in safe seats. The problem is that everyone knows that these seats are safe, so he odds tend to be pretty short. Nonetheless it is perfectly possible to make some money here, although you will have to make a decent amount of money here. The odds that you will be getting are often around 1.25 (you make a 25% win on your investment if you win the bet so a bet of £40 will make you £10 profit.) If you can get odds of 1.25 on a safe seat you should bet on it.

Of course the bigger money will be made on speculative bets at longer odds. If you can spot something unpredictable coming or if you can get amazing odds on something that may happen. What you have to accept, though, is that most of your speculative bets won’t come in, but it only needs a couple of them to for you to be making a nice big profit.

Nothing’s safe
It also happens to be the case that nothing is safe in an election, so you should spread your bets. Even in the safest-looking seats, you shouldn’t put more than about 20% of your total stake on any one bet, because if that seat happens to be the one with the upset then you could be in for a nasty loss. So spreading your bets will decrease the variance of your bets and therefore your chance of a big loss.

When to bet
As we get towards the election the odds will begin to tighten up. Safe seats will yield very little profit, and surprises will become predicted and therefore stop being surprises. Other odds will lengthen but will have less of a chance of coming in. So, the big idea is that you want to be putting on your safe bets as soon as possible if the odds are looking good. Chances are that odds on safe seats aren’t going to lengthen from here on in. If you have good inside or local knowledge and the odds look long to you then place your bets now too, although this is rather risky.

Trading bets
One of the best features of betfair is that you can bet against something happening as well as for it happening. I.e. you can bet against yourself and make a guaranteed profit before the election takes place. Although this tends to be a low profit game, the money is without risk so it is sometimes worthwhile. Here’s an example:

I bet £5 at 5-1 that labour will take a constituency. Over time, the odds fall to 4-1 and I now put £22 on that labour won’t take the constituency. Now, if labour wins I make £25 profit and get my stake of £5 back (£30 total) and if labour don’t win I make £6.50 and get my stake of £22 back (£28.50 total) so I have a guaranteed winnings of £3.50-£5 on my bet of £25.

So, when do you use this? The answer is when you have put money on something dodgy and the odds have moved but you are pretty unconvinced that you’ll actually win the bet. It is worth reviewing all of your bets regularly to see if you can trade them like this and also finally reviewing on the night before the election to see if there are any you really should sell like this.

The other time you should use trading is if you spot some odds on betfair that are very good or very bad and you feel they will change, or if you have identified a trend with some odds that are getting shorter and shorter or longer and longer. Remember, though, that winnings on bet trading are going to be considerably smaller per pound invested than actually winning bets.

Overall strategy
There are going to be some people out there just wanting to make a small profit on the election. For them I just recommend they put money on the best odds they can for safe seats, but this really isn’t much fun. For the rest of you, I suggest that your strategy works in the following way:

1) Work out exactly how much you want to invest in election gambling.
2) Put 80% of it on safe seats getting odds of at least 1.25. Put these bets on as soon as possible!
3) Put the rest of the money on interesting but possible speculative bets, or on bets where the odds look like they will move significantly for trading purposes.

This way you should at the very least make a small profit, and if a couple of your speculative bets come in you should make a good bit of profit. I imagine we at The Third Estate will be putting up a few tips over the next month, and keep checking our Election Gambling page to see how we’re doing, and if you’re a blogger too, let us know where you’re putting your money and we’ll add the bets to our page.