PUNTER INSIGHTS: BETTING ON POLITICS
As we count down to November, and the US Presidential Election, we take a deep dive into the intricacies of betting on politics. When to Back, when to Lay, how to identify a price advantage and how to model for outcomes.
We spoke with a passionate and successful Betfair political punter who shares valuable insights for Hub readers on what to expect before this and every election.
Political punting is its own unique feature, and here we will try and unlock the key strategies in markets that generally hold very high liquidity.
This successful punter has bet on horse racing for a long time, but his passion has always sat with politics, and he came to use Betfair for this content just prior to the 2016 US Election.
Have you always had an interest in politics? And betting into politics?
“I started out in the 2016 US election, when Trump beat Clinton. The market moved around enormously on election day and it was so exciting to trade the swings.
“I do a bit of punting on the horses but mostly just for fun. The politics markets are what I’m really passionate about.”
What draws you into the US Election in particular, and how important is the high liquidity?
“It’s such a highly covered event, with news happening every day that moves the market, which is a valuable asset for a punter.
“The other plus is the event goes for a long time. You can trade throughout the year, taking an open position for a few days or even months and then hedge that position once the odds correct themselves
“Liquidity is critical and Betfair is really that only place that can provide enough liquidity. There’s no where else that you can put large volumes on at a time. It also means that the back-lay spread is always tight -in fact usually they’re touching.”
Markets within a market, is that where the value is? Democratic nom, popular vote, senate voting etc?
“What people don’t realise is that there’s a complex relationship between each of the markets that you can model pretty well – e.g. if you believed at the start of the primary that Haley had a 10% of winning the nomination and a 60% of winning the election, conditional on getting the nomination, you can find value in either the nomination or winner markets, and you can trade the movement in those markets.
“There’s also sometimes an arbitrage between the election winner, popular vote, and election winner to lose popular vote markets.”
Why do you use Betfair?
“It’s all about the odds. Betfair has the best odds by far. The commission is very reasonable. It’s also clear that the other bookies are just following the odds on Betfair. I don’t think I ever seen a political market where one of the other bookies has sharper odds than Betfair.
“The other thing is that it allows me to trade the ups and downs on a candidate without needing a lot of money, because I can offset my backs and lays. On a traditional bookie you can’t do that without committing a lot of money.
“Plus you only pay commission if you win.”
What are you predicting this time around?
“It’ll be a red wave. I think Trump will win by a long way and the Republicans will hold the House and take back the Senate.” (Prediction taken prior to Kamala Harris taking over)
