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Matthew Shaddick: Why the betting markets are over-rating Marine Le Pen’s chances

January 12th, 2017

Shadsy of Ladbrokes on how punters are viewing the French Presidential race

Ladbrokes are currently building up a very big liability on a Marine Le Pen victory in May’s French Presidential election. I’d be very surprised if that isn’t also the case with all of the other fixed-odds bookmakers offering odds.

I’m happy with that, as I can see some very good reasons why the betting markets are over-rating her chances.

1. It’s possible that a lot of people betting on her are not all that familiar with the electoral system. Plenty of media reports will refer to her as leading in the polls, and it’s true she is ahead in some of the first round voting intentions.But, in the second round match ups, it’s not even close; she’s typically polling 30pts behind the other likely runners. Trump and Brexit were never remotely that far behind in the run-up to those votes.

For various regulatory reasons, French voters are mostly going to find it very hard to place a bet on the election, so the people who really do know the system are minor players in this market

2. The Brexit/Trump winners are playing up their winnings.. Plenty of people have done very nicely out of betting on politics over the last couple of years. A Tory majority, the referendum and Trump all lined the pockets of the casual political punter who was prepared to ignore the “experts”, the polls and the markets. I can see that a lot of those are continuing to ride that wave with Le Pen. Maybe they will be right again, but more likely this factor will lead to her being over-bet.

3. Le Pen is the story as far as the media are concerned, certainly in the UK. No report on the election could possibly leave her out, but frequently nobody mentions Macron who, in my opinion, has a much better chance of becoming President. With some UK bookies, Macron is over twice the price.

If you want a better estimate of Le Pen’s chances, I’d look at the markets at Hypermind. Normally, evidence shows that prediction markets where cash is at stake provide better estimates but, in this case, I’m not so sure.

Hypermind is a French based “SuperForecaster” effort, which is one big plus. If you’d been following it earlier in the campaign you might be sitting on some very nice bets on Fillon, as their forecasting saw his chances improve much before the betting markets. You could have got 33/1 a couple of weeks before the Republican primary. He’s now odds-on.

Currently, Hypermind gives Le Pen a 12% chance of winning, which equates to about 7/1. Macron is showing as about a 24% chance – almost 3/1. He’s still a good bet at the bookies.

Matthew Shaddick (Shadsy) is Head of Political Odds at Ladbrokes