Making a tissue on a “Betting Without” market

This is a betting thread without a market as yet. However, the best prices on any political market can usually be found within either the first six hours or the last six. So a little forethought as to what you’d be prepared to back – and at what price – can often be rewarded handsomely. Someone launching a “without the SNP” market on Holyrood is only going to be a matter of time and there’s every reason to think there might be value about. Let’s make our own tissue.

A quick refresher on the voting system: voters get two votes, one for their local constituency, and one for a regional list (regions comprising between 8 and 10 constituencies). The list seats are doled out using a d’Hondt system, but taking the constituency results into account.

Polling at 60% in the constituency section, the SNP are going to win. Indeed, Ladbrokes only offer 5/2 on them winning all 73 constituencies, which might be a touch skinny. But the 2/7 on an overall majority (65+ seats – the parliament has 129 MSPs) looks about right: they will probably be in a position to win one or more top-up seats in a region where they sweep the constituencies – just as they did in North East Scotland last time.

So, in the face of an SNP near-sweep, who will come second in seats is predominately a question of who will come second in list votes. Even if Labour or the Conservatives pick up a constituency or two this will usually be at the expense of a list seat they would have won anyway. An exception might be if one party could do especially well in the constituencies of a specific region: there’s one plausible possibility I’ll highlight below.

The TNS list polling [from 13th-31st May] was as follows (changes from 2011 result):

SNP 50% (+6)

Labour 19% (-7)

Conservatives 14% (+2)

Greens 10% (+6)

Lib Dems 5% (=)

I think we can pretty safely rule out the Lib Dems coming second in seats, so I’ll examine the case for and against the other 3 parties. It looks like around 18% will be enough to win.

Labour

Labour are deservedly the clear second favourites on the main market – 10/1 at Ladbrokes. But this is because they are best placed to benefit in the event of any major scandal or cock-up on the SNP’s part. Absent that, there’s actually little reason to assume that there might not be a further net movement away from Labour.  As John Curtice puts it:

Labour’s figures in [the polling quoted above] are also much worse (and the SNP’s better) than they were in polls conducted by YouGov and Survation just before the May 7th ballot that saw all but one of Labour’s MPs swept away.

In short, it looks as though that disaster may have further dented voters’ confidence in the party’s ability to govern and/or persuaded them the SNP is better able to advocate and promote Scotland’s interests.

For all that, I think Labour should still be well odds-on, representing as they do the default opposition.  I’ll say 70% for now.

Conservative

The Scottish Tory surge has been a long-running meme on PB, and a profitable one for those who’ve opposed it. In the context of the SNP dominance, the Tories are now surging by standing still.

The Tories might also manage to pick up several constituencies in South Scotland. They already hold Ayr, Galloway and West Dumfries, and the triple-barrelled Ettrick, Roxburgh & Berwickshire, though the SNP are a potential threat in every one of these. Dumfriesshire is a target gain from Labour for both Con & SNP. If they were to win all four seats this is likely to be a net improvement on their theoretical entitlement based on the list percentages.

However unless the Tories can actually put on votes (from ex-Lib Dems, maybe?) then they’re going to have a hard time getting enough to come second overall.  Let’s give them a 15% chance for now.

Green

The Greens aren’t going to overtake both Labour and the Conservatives on the strength of their message. But they are likely to be the beneficiaries of an attempt to play the voting system by independence supporters voting “SNP constituency : Green list”.

By voting this way their votes will definitely go towards electing two independence-minded MSPs – whereas if they go SNP:SNP they may not see any extra list SNP members elected at all in a region, because the constituency sweep will already have given the SNP their fair share.

So the nub of this market is to assess how widespread this phenomenon will be. The SNP can’t endorse it explicitly and even if they do so tacitly they run the risk of upsetting their own list candidates. But some of the membership will think differently of their own accord and spread the message online, where the SNP have a strong presence.

Perversely, if the SNP continue to poll 50% or above the appeal of this manoeuvre is reduced since that makes the Nats more likely to pick up list seats. 45% is probably the sweet spot.

Overall, I’ll credit the Greens with a real shot at pulling this off and say 25% for now.

Making a tissue

We now need to scale our 70:15:25 estimates back to total 100%, giving us 64:14:23. Converted to the nearest classical bookie prices that gives us a tissue of:

Labour 4/7

Green 7/2

Conservatives 6/1

If, when the market goes up, you see a price bigger than this on any of these I’d tentatively suggest that it might be value.

If we wanted to act as a bookmaker, we would scale back up to e.g. 110%, to give ourselves some margin. But rather than multiplying through back up to 70:25:15 it would be more usual to stick 3% or so onto each realistic runner (which is all three, in this case).

Labour 1/2

Green 11/4

Conservatives 5/1

Finally, when trying to estimate political probabilities, I’ve frequently found the comments on pb threads to be a huge source of wisdom and information.  So no doubt I’ll be re-evaluating these prices in an hour or so!

Tissue Price