It’s on. The election on September 14 is one-way traffic according to the betting markets, with Tony Abbott’s Coalition at Black Caviar type odds to move to the Treasury benches.
Right through the period until election day, I will be providing weekly updates on the betting markets for the election. There are at least eight betting agencies offering odds on the overall election outcome and several offering odds on individual electorates and other exotic markets.
Before getting into the first such column, I want to emphasise that this analysis is not necessarily an endorsement of election betting and it favours no betting agency. What makes the betting markets relevant and worthy of comment is that they are more timely than the regular public opinion polls, which are irregular and subject to a margin of error. Polls are obviously powerful indicators of voter momentum, but an advantage of betting odds is that they are 'live' and update any time of the day or night as events of influence emerge. In addition, they are based on the weight of money.
In what is a competitive market for election betting, each betting agency frames its own odds which means those interested in an election wager can shop around to maximise your return.
So to the odds at the moment.
The Coalition is generally $1.17 to win the election while the Labor Party is the $5.00 outsider. This means that for every $1 placed on the Coalition, you will get a return of 17 cents if it wins, while $1 on Labor will deliver a $4.00 profit, of course, depending on them winning.
In other words, the betting agencies have the Coalition the hot favourite. This is unsurprisingly consistent with the public opinion polls which generally have the Coalition two-party preferred vote around 53 per cent versus Labor at 47 per cent. A uniform swing of 3 per cent to the Coalition would see it secure a majority of around 25 seats.
The $1.17 might seem very skinny odds for the Coalition given there are still seven months to polling day, but unless the Labor Party can alter voters' perceptions, a 17 per cent tax free return over seven months is a stunning return for those who consider the Coalition home and hosed.
For those thinking that Labor has a chance to pick up and win, the $5.00 on offer represents a 400 per cent return, tax free, in seven months. This beats some of the penny dreadful stocks that come to discover a rich vein of ore on their land.
So it is Black Caviar versus a penny dreadful stock in terms of potential return.
What we do know is that one side or other will win the election on September 14. At the moment, the betting markets are saying that Australia will have a Coalition government on September 14. Like all markets, the odds will no doubt change in the days, weeks and months ahead. But which way -- and even then, can the electorate be trusted to make the right choice?
Let’s see how the odds change over the weeks and months ahead. It should be fascinating.
For those with a gambling problem, please see www.problemgambling.gov.au