How will the betting exchange settle the departure date market?
Anybody who had money on last November’s US MidTerms Senate market with Betfair will know what happens when the rules are not tied down tight enough.
Then Betfair settled the election on the basis of a tie even though the actual outcome was that the Democrats took control of the Senate. Then the problem was the position of two senators who had not gone into the election as Democratic candidates but had said they would caucus with the party.
An added complication for Betfair was that the Labour MP, Nick Palmer, had written to Betfair ahead of the election asking for clarification about Liebermanâ€™s position and had received a written reply confirming that if he won he would be regarded as a Democrat. Palmer had posted this information of this site influencing, no doubt, a number of other punters in the process.
So how are they going to interpret the rules (reproduced above) of the Blair exit market? If, as many suggest, Blair has to resign as leader in order to trigger a contest then that looks like a 2007 Q2 winning option. But if it is on the basis of when he steps down then, assuming that everything goes according to current reports, the winner should be Q3.
The current betting on the two outcomes is evens on Q2 and 0.99/1 on Q3 – so punters are totally split. For what they are probably gambling on is not the date but how Betfair will interpret their rules.
You might think that writing to them might be the best way forward but having seen what happened to Nick Palmer’s correspondence how do we know they will stand by anything they say?
Because of the uncertainty I am no longer involved with this market and have closed down my positions.
As an object lesson in how to tie something like this up properly Betfair ought to look to the Cantor Spreadfair betting exchange. Their market rules state explicitly “If Tony Blair announces his resignation for a date in the future, but carries on as Prime Minister in the interim, then the market will be settled on his actual final day as Prime Minister, not the time of the announcement.”