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Labour eases to 1.4 – is now the time to bet?

June 24th, 2004

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    ….but Labour spread range hardens

Moves against Labour on the General Election markets have seen the price go to 1.4 with William Hill, which has almost certainly got the biggest book and reflects money going on the Tories. This is the best value on Labour for a very long time and now might be the time to bet.

    To underline the value of this price punters should note that of the £306,000 that’s been matched on Labour in the Betfair betting exchange General Election market just £62 has been at prices at more than 1.4. At the time of posting the Betfair price is 1.34. At the William Hill price a £100 winning bet produces £140 back including the stake.

As we have said repeatedly it is very hard to see how Labour is not going to end up with most MPs at the General Election because of the way the seats are distributed. Michael Howard needs to be getting consistent poll leads of at least 6% on YouGov before there is any doubt at all on the outcome. The Tories are a long way off that.

The real issue for political gamblers is not the outcome but the price and 1.4 looks very good to us.

Confusingly the latest General Election spread betting prices are moving in the opposite direction with bigger numbers for the Labour and the Lib Dems that have not been fully off-set by a decline for the Conservatives. The latest prices are:-

LAB 330-340 (+2) CON 238-248 (-2) LIB 55-60 (+2)

The move in the Lib Dem spread follows our BUY CALL last week when the price was on 58. If the party takes Leicester South at the coming by-election then we would expect to see this spread to rise further so the BUY price of 60 is still a value bet – just.

But the confusing part of the new prices is that the Conservatives have declined by 2 seats whereas the Lib Dems and Labour have, between them, gone up by 4. Taking into account Northern Ireland and SNP/PC seats it appears that the spreads are working on an inflated House of Commons with 661 seats not 646, 13 of which are accounted for by the changes in Scotland.

    Is there are profit opportunity created by the spreads working on the basis 15 MPs more than will be elected at the next General Election?

This has most impact on the Labour spread price which would seem to include the 10 seats that the party will lose as a result of the boundary changes – which as we pointed out in April have not been factored in by the spread betting firms. Our advice is to be very wary of a BUY bet on Labour until this is clarfied. With just one MP in Scotland this has almost no impact on the Tory spread.

If the Labour trend continues to rise then with the 10 seats that are going anyway we might reach a stage where a SELL bet becomes good value. We are probably about 4 seats from that point.

Image – http://www.aperfectworld.org/clipart/places/bigben_small.gif






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