With the year now half gone, many will be looking back at the major events that altered the political landscape in the second half of 2016. One event in particular sticks out: On August 18th, 2016, American democracy was rocked when Donald Trump, an unlikely candidate, upset the political establishment and emerged victorious in the 2016 Presidential Election. Trump’s victory was seen as a major upset by many, with the odds reportedly favouring Hillary Clinton from the beginning of the year.
Despite his popular vote victory, some saw Trump’s victory as less than real, arguing the election was skewed in favour of the Republican candidate due to unfair polling, voter suppression, and skewed media coverage. Regardless, the results of the Election were undeniable: Hillary Clinton’s campaign for the presidency and the Democratic Party suffered major setbacks, while the Republican Party saw a major breakthrough.
Many will be looking back at these extraordinary times of political change and turmoil, as well as at how they bet on the outcome of the election. In the following article, we will examine the betting odds, or as some may call them, the ‘prop-ratings’, for several interesting races throughout the year, using Oddsy as our platform for researching odds and providing analysis of global betting markets.
The Brexit Betting Market
The ‘Brexit’ or ‘British Exit’ was the unofficial name given to the vote on June 23rd, 2016, in which the United Kingdom decided to leave the European Union. While many viewed the Brexit decision as a political disaster, few doubt the result was largely due to the unexpectedly high betting odds against the UK staying in the EU. For months leading up to the referendum results, punters placed a lot of money on the UK staying in, with many odds-makers going against the general public in favour of a so-called ‘Remain’.
The UK’s decision to leave the EU was a major upset to the global betting markets, and not only because of the UK’s size as a country. According to Oddsey, a source close to the Brexit betting market, “The fact that [a] small country [could] overturn such a massive political decision, especially one as big as the EU, was pretty extraordinary.”
In the year leading up to the referendum, the betting odds on the UK leaving the EU were very strong, especially considering how popular opinion favoured remaining within the EU. For instance, prior to the vote, the bookmakers offered 2/1 or less for the UK to remain in the EU, an opinion shared by a majority of people in a survey conducted by Survation. More than 85% of respondents stated they would back another country joining the EU, while 73% wanted to see the UK remain in the EU. Only 14% believed the UK should leave.
One factor that may have contributed to the big swing in public opinion was the shock announcement by Michael Gove, a prominent Brexit campaigner, that he would be standing down as Justice Secretary and replacing him with the more conservative Andrea Leadsom, despite support from Theresa May, the Prime Minister, for her own bid for the leadership. The announcement spurred many older, more experienced voters to get involved in the referendum, leading to an increase in the youth vote as well. Overall, the turnout for the EU referendum was 72%, and as a result, 52.5 million people voted to leave, while 47.5 million people voted to remain.
On the day of the referendum, with the odds still firmly in favour of the UK leaving the EU, bettors were faced with an unpleasant dilemma: to back or to leave? According to Oddsey, “It was certainly a difficult decision to make, with many people in the UK undecided about how to vote.” Ultimately, the majority decided to leave due to the relatively high odds, with 56.7% going for the ‘Leave’ campaign and 43.3% backing the ‘Remain’ campaign.
The odds of the UK leaving the EU dramatically improved in the weeks and days following the referendum, even though the general election was still a year away. On June 24th, 2017, just two weeks after the Brexit referendum, the bookmakers offered 1/3 or more that the UK would leave the EU. While the odds have reduced since then, with the possibility of a no-deal Brexit diminishing, they are still considerably higher than they were prior to the referendum in favour of leaving the EU. According to Oddsey, “The market has moved on from betting on the EU referendum to now focusing on the UK’s relationship with Europe going forward.”
The Election Betting Market
On June 23rd, 2016, America went to the polls in what was arguably the most important election in the country’s history. The results were astonishing: Hillary Clinton beat Donald Trump by nearly 3 million votes, or 55% to 41%. The final results were not in until October 31st, but the betting market had already established a clear favourite: Hillary Clinton was the overwhelming favourite to become the next president of the United States.
The odds for Hillary Clinton to win were very short prior to the election, and that was the case for much of the year. When it was first announced that Hillary would run for president in 2016, the odds were heavily against Trump winning, with the bookmakers giving Hillary about a 7/1 shot of winning. By July, with Trump making a number of controversial comments and Clinton still struggling to gain enough support, the odds had shortened to about 6/4. As the general election approached, it was clear that Trump was a major underdog, with many odds-makers giving Hillary a 5/1 shot of winning. Even after the shocking results of the election on November 8th, the odds still favoured Hillary Clinton, with many bookmakers paying out on the outcome of the election well before the final results were known.
The situation was similar for the Democratic Party as a whole. Prior to the 2016 Presidential Election, the odds were strongly against the Democratic Party doing well, with the bookmakers giving them less than a 1/3 chance of taking the White House. However, after a number of high-profile scandals rocked the Republican Party in the lead-up to the election, and Trump became the clear frontrunner for the Republican nomination, the odds turned dramatically in favour of the Democrats. By July, the odds for the Democrats were about 3/1, and by October, when the election was finally called, the betting markets gave the Democrats a better than 1/4 chance of ousting Trump from the Oval Office.
The odds for the Democratic Party to win the Presidency in 2020 are currently 7/4, not quite as good as they were in 2016, but still a considerable improvement on what they were prior to the 2016 election.
The Brexit Election Betting Market
The odds on Donald Trump becoming US President in 2020 are about even, with the bookmakers giving him a 7/1 shot of winning. While the odds may not seem that bad, considering Trump’s background and the state of the world at the moment, they are not a good sign for the 45th president.
In the 2020 election, the chances of a second Brexit dramatically improved the odds on the UK leaving the EU. While it is still not certain that there will be a second referendum, the chances of the UK leaving the EU in the next decade are now much better than they were in the last year of the 20th century. The chances of the UK leaving the EU were only 4/9 prior to the referendum, and have improved to 9/4 since then.
Which Remainer Will Be the First to Offer Brexit Betting Odds?
One of the most interesting things about the 2016 referendum on European Union membership was how much the betting markets swung in favour of a ‘Remain’ vote. While most people had strong opinions about whether the UK should stay in or leave the EU, the betting markets were relatively balanced, with about 50/50 odds of a ‘Remain’ or ‘Leave’ vote. That was one of the major reasons for the Brexit result, as the public were able to make their opinion known, but not necessarily in the way that the political establishment had expected. For instance, while older, more experienced voters backed staying in the EU, younger people favoured leaving, with more than 70% of people aged between 18 and 24 backing Brexit.
As we have established, UK politics were changed dramatically by the Brexit vote. For the Brexit betting market, it was the turn of the Labour Party to suffer, as much of the public backed remaining within the EU, which saw Jeremy Corbyn, its leader, criticised relentlessly during the campaign. As an immediate result of the Brexit vote, bookmakers shut down all of Corbyn’s bets for the next five years. Odds-makers also largely avoided betting on politics until a later date, with only a handful of odds being set in the month following the referendum. Since then, as the fallout from the Brexit vote continues to be felt, the betting markets have returned, and it is now more popular to bet on politics than ever before.