Is this the best value odds-on bet?
Odds-on betting isnâ€˜t always particularly attractive, especially when the bet lasts over several months. A lot can happen in the meantime to upset expectations, it ties up a lot in comparison to the anticipated return and even if it does come in, thereâ€™s no great sense of elation, as when picking a long-odds winner – and of course, nothing like the returns either.
Even so, thatâ€™s not to say there isnâ€™t any value in these sort of bets. Of the current odds-on options, the stand-out value would look to me to be in the Next GE – Party Leaders market and Next PM markets. These are both Betfair markets and as is often the case there, that means that there is limited money available – but what is is at prices well in excess of online Bookies.
The Brown/Cameron option for which party leaders will still be in place at the election was priced at 1.3 to 1.32 at the time of writing (by contrast, Brown
not to be Labour leader at the election is 1/7 with Ladbrokes, giving about half the return). To me, Ladbrokesâ€™ price looks far more sensible.
Since the subject of whether Brown might step down was last seriously visited, two things of significance have happened: the clock has kept ticking and the Glasgow NE by-election has taken place, bolstering Brownâ€™s position.
The clock matters because the window is now closed on a change before the Christmas recess. Of more importance though is that the subject is simply not under discussion any more: without debate there will be no change (actually, even with discussion itâ€™s always been likely that thereâ€™d be no change).
The last genuine opportunity for Labour to replace Brown is early in the New Year. After that, thereâ€™ll simply be too many things that would get in the way, not least election preparations. However, even attempting such a manoeuvre is highly risky (if it fails, itâ€™s wasted time, effort and made the party look petty and insular; if it succeeds, the outcome is at best uncertain). I get no sense that thereâ€™s any inclination to even consider it. The die looks cast – and to that end, a 30% return in six months looks attractive. The downside is the opportunity cost: what canâ€™t be done with the same money.
Looking at it another way, PaddyPower offer only 1/10 on David Cameron being Next Prime Minister. As the prospect of him becoming PM before the election has to be next to nil, thatâ€™s rating Brownâ€™s survival prospects strongly (the difference between the bets being that itâ€™s possible to still win even if Brown remains PM after the election e.g. in a hung parliament). Betfair also have a market on this but itâ€™s very illiquid though the odds on offer are in line with their other market quoted earlier and considerably better than the bookies – for whatâ€™s there.
On a similar theme, Brown would have to survive until April 22 for a buy on Sporting Indexâ€™s Brown and Out market to pay out. Given the (admittedly small) possibility of a March election, that indicates that theyâ€™re very confident about his internal survival chances.
The other obvious market as an alternative is Overall Majority, where the Tories can be backed as high as 1/3 with the bookies and almost 2/5 (before commission) with Betfair. Iâ€™m much more wary of this and in the context look on it as nowhere near the value. Were the election held today, the Conservatives should win an overall majority but six months is still time for events to intercede and the hundred plus gains needed is far more than the Tories have ever achieved in the post-war party system. Odds-on, yes, but not a formality by any means. Again, the Next PM market builds in something of a buffer here as even if the Tories fall a bit short, Cameron would still be highly likely to become the next PM.