Could the Lib Dems win both Westminster seats?

An almost total absence of Labour backers led to last night’s price moves on the by-election betting markets which leave the Lib Dems as heavy odds-on favourites in Leicester and at times touching evens in Birmingham. William Hill closed their market at the stated time with the Lib Dems on 4/11.

If the betting markets are correct then there’s a chance that the party could be heading for two number one positions on Thursday night.

The main focus is now on the Betfair betting exchange where punters try to find other punters who will lay their bets. If you’ve never tried this form of betting then now might be the time to have a go. Normally exchange odds are much more sensitive than those from the normal bookmakers although if there are few backers and layers about prices can go all over the place.

A word of caution on quoted betting exchange prices. They only show what other punters are prepared to offer. So at the moment it looks as though the price on the Lib Dems in Birmingham is 2/5 or 1.4 in Betfair terminology. In fact the last trade was at 9/5 and nobody has bet at anywhere near the 2/5 – it is just that at the time of this post that is all that is available. Also with the exchanges you have to pay 5% commission on your winnings.

The lack of Labour or Conservative interest has meant there’s hardly any liquidity in the Betfair markets although the Lib Dem price did drop below evens at one point for Hodge Hill. At the time of posting the last trade on the party for Leicester South was at 45/80 some way up on the William Hill close.

From a betting perspective the big mystery is the almost total lack of interest for Labour in these markets especially when the party is defending five-figure majorities.

Clearly the activists are far from convinced that they have a chance. The Betfair betting exchange gives precise details of the level of bets and price history to date.

Leicester South – Betfair share of matched bets on each party
LIBD 75%: LAB 22%: CON 3%

Birmingham Hodge Hill – Betfair share of matched bets on each party
LIBD 74%: LAB 17%: CON 7%

The big question is whether you can deduce who will win from what’s happening in the betting markets. For a 4/11 favourite in an election not to win would be a betting sensation yet, as we argued yesterday, the risk-return ratio is not right. We think the Lib Dems will do it but there are too many issues for us to declare them a certainty.

Hodge Hill is harder to read and there is little doubt that prices tightened considerably for a time on the Lib Dems. We do not think that any party is convinced they have victory in the bag there.