Who’s going to win the next UK and Australian general elections? Who’s going to be the next US president? You probably have an opinion but are you willing to put money on it?

Well, around the world and increasingly here in Australia, there are many thousands of people willing to do just that.

As I reported in last month’s PPM, betting on politics is the new "in thing" as far as betting goes. The shrewdies are starting to cash-in.

One of the results of this rush of interest in political betting is the emergence of "how to" books on the subject. And the current leader in the field is, The Political Punter by Mike Smithson.

Smithson, the man behind www.politicalbetting.com, takes a detailed look at the world of political gambling, from the basics of how and where to gamble to the characteristics of the main markets and the forms of betting available.

Smithson says: "The hard fact that usually only the bookmakers win in the end and the gamblers usually lose applies to the body of all punters, but it’s clear that over time the performance of some punters is greater than others and those with good political skills and an understanding of how betting markets operate can and do make money.

"My objective is to assist readers to become part of that group and to enjoy themselves at the same time. The latter is an important element. For many the great satisfaction of betting on political outcomes is not just the money but the pleasure of being proved right.

"Anyone can have an opinion about a political outcome. The gambler has put money behind it and winning is a way of validating your judgment."

Smithson’s book includes a number of case histories where the lessons of the past might be helpful for the future.  The explanations of the mechanics of different forms of betting and a wide range of betting options should also make the newbie to political betting more confident to try new things.

For non-gamblers with a keen interest in politics, the book gives enough background to allow you to dabble a bit and to get a better feel about possible political outcomes by understanding how those who are backing their opinions with cash are actually thinking.

Mike Smithson is the founder of the highly regarded blog, www.politicalbetting.com. For 13 years, he was a journalist with BBC News and was part of the team in the mid-1970s that handled the first Broadcasting of Parliament experiment. This was followed by regular stints at Westminster.

In 1977, Mike ousted Denis McShane (who went on to become a Labour Foreign Office Minister), as National Executive member for the UK’s Radio and TV journalists at the National Union of Journalists. He was a founder member of the Liberal Democrats and stood for Parliament at the 1992 General Election and was elected twice as a County Councillor in Bedfordshire and has also been a Borough Councillor in Bedford.

For the last 15 years he has worked as a university fundraiser and was the Director of Development at the LSE, Cambridge and Oxford universities and now has the same role at the University of York. In April he moved to the Open University.

One example of how punters have chased in for big profits on political betting is the recent decision by bookmakers William Hill not to wait for the outcome of a UK Labour leadership election and to pay out to all their hundreds of customers who, over the past 10 years, have backed the Chancellor Gordon Brown to succeed Tony Blair as Prime Minister.

"It will cost us a significant six figure sum", said Hill’s spokesman Graham Sharpe, "But all of the remotely credible rivals to Gordon Brown have ruled themselves out and it would be churlish to sit on the money for six or seven weeks as some patient punters have now been waiting over a decade to be paid out."

Hill, who made Gordon Brown 5/1 favourite to succeed Tony Blair on the day Labour won the 1997 General Election, were quoting him at 1/200 by the time Tony Blair made his departure announcement. And now William Hill has even begun betting on who will, in turn, succeed Brown and have installed David Miliband as hot favourite at 2/1.

A Welsh political punter who collected £10,000 from Hill by backing the SNP to win the Scottish Election, and a further £3,200 by betting on when Tony Blair would cease to be Prime Minister, has now bet £600 at odds of 5/1 that Alan Johnson will become the next Deputy Leader of the Labour Party and will collect a profit of £3,000 if he is proved right.

David Spencer, a 56-year-old retired accountant from Swansea, specialises in political betting and has collected £13,200 from William Hill by staking £2,000 on the SNP at 4/1 and also investing £500 that Tony Blair would stand down from office in June 2007.

"Mr Spencer is enjoying a rich vein of form at the moment and if he continues to do so we may have to consider employing him as a political betting adviser," said William Hill spokesman Graham Sharpe.

Let’s look at some of the key pieces of advice that Smithson has for political punters:

  1. If the person or party you want to back is a strong election favourite, the earlier you get your money on the better.
  2. If you want to bet on anything other than a strong favourite, wait until after the polling booths have opened to get a better price.
  3. Punters have a strong herd instinct and can often lose money following other punters who are losers.
  4. On US election nights, always assume that the leaks of exit polls and the exit polls themselves, are over-stating the Democrats’ strength.
  5. In races for the Democrat or Republican nomination in the US, assume that early opinion polls are little more than tests of recognition not popular support.

Smithson makes the valid point that the great luxury that political punters usually have is TIME. Decisions do not usually need to be made in an instant and time can be taken to look into the background of your proposed punt.

As I write this in the last week of May, the Australian election battle was starting to really hot up, with Labor assuming a huge lead and one big enough to have the Government rattled.

So how was this reflected in the betting? On May 30, Centrebet had the following market:

LABOR $1.65

This shows a very clear margin for Labor. By the time you read this article, the prices may well have changed, depending on what "crisis" might have erupted in the meantime to cause a change in public thinking.

As far as the US presidential election is concerned, the odds at May 30 were:

CLINTON, Hilary 3.00
OBAMA, Barack 4.50
GIULIANI, Rudolph 5.25
GORE, Al 9.00
MCCAIN, John 10.00
EDWARDS, John 11.00
ROMNEY, Mitt 12.00
THOMPSON, Fred 12.00
BLOOMBERG, Michael    26.00
RICHARDSON, Bill 34.00
BROWNBACK, Sam 41.00
GINGRICH, Newt 41.00
HAGEL, Chuck 46.00
PAUL, Ron 51.00

Hilary Clinton holds a significant lead and her immediate challenger is another Democrat! For the Democratic nomination for President, the betting at May 30 was:

CLINTON, Hilary 10/11
OBAMA, Barack 11/4
GORE, Al 11/2
EDWARDS, John 15/2
RICHARDSON, Bill    25/1
BIDEN, Joseph 40/1
FEINGOLD, Russ 50/1

Once again, Clinton seems to be a hot favourite.  For the Republican nomination, the betting was:

GIULIANI, Rudolph   163/100
MCCAIN, John 11/4
ROMNEY, Mit 4/1

So, the hero of the 9/11 disaster aftermath is the hot choice to run against Clinton for the Presidency.  Once the Australian election race gets into full swing, there will be some fevered betting taking place. Bookies are expecting their best year yet for turnover.

The biggest elections on an international scale are, of course, the US and UK ones. Mike Smithson will probably be hoping that Batack Obama can win the Democratic nomination. He says in his book:

"In May 2005, I had been looking over possible presidential candidates and decided to put 50 pounds on him at the then price of 50/1. Even if he does not make it all the way in 2008, I will still feel good from having spotted that he did have the potential to be a serious challenger."

The Political Punter by Mike Smithson (Harriman House Ltd), available from High Stakes Bookshop UK at www.highstakes (www.gamblingbooks.co.uk).

By Jon Hudson