Are betting odds being “managed” to influence the race

Over the past two to three days there have been some very odd happenings on the £500,000 Labour leadership betting market on the Betfair – the leading betting exchange that usually sets the scene for other bookmakers.

For as the chart shows the Brown price has eased considerably from 0.51/1 on Sunday to 0.58/1 where it has remained almost stuck. Now what makes this move remarkable from a betting market perspective is that the prices on the two closest challenges, John Reid and Alan Johnson have been moving out as well.

Normally if a favourite’s price starts to soften then money starts going on another runner where there will be a hardening of the price. That’s not happening here.

Generally long-term markets like this only change when there is some new development like a poll or other story that might indicate that something is moving. We saw that last week in Manchester but this week all the focus has been on the Tories in Bournemouth. The only betting movement outside the top three has been a tightening of the David Miliband price from 40/1 to 26/1.

The question that has to be posed is whether an effort is going on to show that Gordon is not as strong a favourite as he was in order to influence the actual leadership election?

What makes me suspicious is the way the market reacts whenever punters back Gordon at the 0.58/1. Within half an hour more money is laid on the Chancellor to ensure that the price stays at that level.

We saw a similar movements during the Lib Dem leadership race in February when there appeared to be a concerted effort to make and sustain Chris Huhne as favourite even when events were not going his way. I did an analysis at the time and what’s going on with the Brown price now is very similar.

To give you an idea of the scale of the movement at the current price a £100 winning bet would produce a profit of £58. After his conference speech last week the same bet would have produced £41 while in the weeks after the General Election last year you could only expect winnings of £22.

For those not familiar with betting exchanges this article might be a bit hard to fathom. For the exchanges do not operate like a conventional bookmaker. Instead they bring together punters who want to bet on a particular outcome at a stated price with other punters who want to act like a bookmaker and accept a bet at that price. So what’s been happening here is that somebody is prepared to accept bets on Brown at a much more generous price than that which was available a few days ago.

Mike Smithson