Remember when Betfair settled a US election market too early and paid out on the loser?

Remember when Betfair settled a US election market too early and paid out on the loser?

Maybe this experience was behind their caution this time?

Back in January 2012 all the political betting interest was on the caucuses in Iowa the first state to decide in the race to choose the Republican nominee to take on Barack Obama.

On the night the big news was that Mitt Romney had squeezed a victory by a margin of of just eight votes over Rick Santorum pictured above. This was based on information from the state party HQ where it was being emphasised that this was not a certified result. That would come after signed returns has been received from the 1,700 precincts – a process that would take a fortnight.

This uncertainty was reflected in what the editor of the Spectator, Fraser Nelson, blogged at 7.53am GMT on Wednesday morning:-

“Instead of white smoke, Iowa is belching thick fog. Mitt Romney has won by, erm, eight votes. At least so we think, the Republicans say that it has to wait until ‘Certified Form E’ will be returned by all the Iowa counties, which will take two weeks, so this gossamer majority may well vanish..”

In spite of the lack of certainty the bookies – including Betfair – settled their markets that morning and paid out on a Romney victory. PaddyPower, in a smart PR move, announced that those who’d bet on Santorum would have their stakes refunded.

Fraser Nelson and others were right to be cautious. Within 24 hours the result was being called into question by what appears to have been a clerical mistake in a precinct in Appanoose County. Nate Silver takes up the story:-

“The dispute originated when a caucusgoer, Edward True, said in an affidavit that Mitt Romney had been recorded as receiving 22 votes in his precinct, called Washington Wells, when he had in fact received just two votes there on caucus night. Mr. True is a supporter of Representative Ron Paul.

When the result was finally tallied nearly a fortnight later Santorum was found to have been the winner by a margin of just 34 votes. Unfortunately for him he didn’t get the bragging rights from Iowa which might have made a difference in the early primaries. Romney went on to win the nomination but lose to Obama in the November election.

Amongst punters there was an outcry and I just wonder whether it was this experience nearly nine years ago that has made Betfair ultra-cautious on US elections.

Mike Smithson

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