Over 80% of the number of bets taken, by one of Britain’s largest bookmakers Ladbrokes, on the European Union referendum are for a Brexit — but the odds are not in their favour.
Matthew Shaddick, head of politics trading at Ladbrokes told Business Insider that there are more people betting on Britain leaving the 28 nation bloc, even though Ladbrokes’ odds for a Leave vote are at 5/2 versus a Remain vote of 3/10.
However, the bookmaker has repeatedly changed the “Leave” betting odds — last week they were at 5/1, then earlier this week they were at 10/3.
Shaddick added that while the number of bets on a Brexit vastly outnumbered those for Remain, more money was spent on the latter.
“One interesting angle is the fact that while most of the money we are taking is on Remain, the majority of bets are on Leave,” said Shaddick to BI.
“The average bet on Remain is much higher: £330 ($476) compared to £50 ($72) on a Brexit.”
More bets for smaller average amounts may seem strange, but Shaddick confirmed that it was actually common for big sporting and political events.
“It’s not necessarily a paradox,” he said. “When one side’s odds are odds-on, that tends to attract bigger bets. Not much point having £10 on Remain to win £3 when you are not even going to get paid out for three weeks.”
Here’s a look at how much Leave betting has increased over the last month:
Commenting on whether large bets had any tangible effect on the odds, Shaddick insisted to BI that Ladbrokes’ Brexit market mirrored the tight race suggested by other polls:
Betting markets are often criticised as predictors in events like this, as it’s possible that a small number of wealthy investors could have more influence on the odds than the majority of smaller staking customers.
However, money talks and in the betting world, one £10,000 bet counts the same as 10,000 £1 bets. In this case, I think the huge volumes of money being traded mitigates against any one person — or small groups of people — having undue influence. The current odds match up quite well with some of the other forecasting methods.
In another interview with CBC News, Shaddick also suggested that Ladbrokes expected about £100 million to be staked around the world on the EU referendum, with most bets coming two weeks before the vote. This is comparable to a golf major or tennis grand slam event.
Ladbrokes rival William Hill currently has slightly more favourable odds of 11/4 on a Brexit — the same as Paddy Power. William Hill’s Media Relations Director Graham Sharpe echoed Shaddick, telling Business Insider that the betting was going firmly in the direction of “Leave”:
As we went into the Bank Holiday weekend we were happy to offer 9/2 Brexit but since then the betting has been virtually one-way traffic, with very little coming back for Remain. Learning from the Scottish Referendum, the biggest political betting event so far, we can expect the odds to narrow between the two options as we get closer to voting day.