Can betting markets forecast political results?: Image: Unsplash

Can betting markets forecast political results?

Traditional betting has evolved with betting exchanges. Here, bookmakers don’t set odds; punters determine outcomes through demand and supply.


Can betting markets forecast political results?: Image: Unsplash

Traditionally the most dominant and reliable way to get an idea of who will win the forthcoming elections in a country has been political polling. Researchers, statistics, and analysts sit together to come up with the right questions -securing the utmost credibility- that are to be addressed to the right sample, which notably is picked using the most proficient and advanced statistical methods to make sure that it is accurate and representative of the population. In short, political polling has always been the best way to collect reliable data for predicting elections. 

But polling is no longer the only source of getting information and data on the voting intentions of people. Political betting, which can now be done on any South African sportsbook, on online casinos in South Africa, or on other betting sites, has grown to be an equal partner alongside polling, helping analysts make even more accurate forecasts on elections’ outcomes. And that’s thanks to the growth of betting exchanges. 

What we know about conventional betting, has changed with the emergence of betting exchanges. Conventional betting, even if we are talking about political bets, is done with having a bookmaker setting odds and lines and determining betting markets and a punter placing a wager based on the bookmakers’ offerings. So, in politics, the lines and odds represent the betting sites’ estimations of how likely an outcome is to occur.

Limitations of Conventional Betting

Betting on what is offered doesn’t actually say much about what people believe or expect to happen. Because bettors only back the outcome that is offered by the bookies, in the odds that are set by the bookies. And if we consider bonuses offered by betting sites and casinos to trigger activity -such as those found here – we do realize how betting can be distorted in a way.

This limitation is removed in betting exchanges, where the bookmakers are being left out of any betting activity and the punters are the ones to lay and back a bet. Simply put, this means that every market represents what people believe and expect to happen and every market is determined by demand and supply. 

What bettors lay and back in the betting exchanges says much about their intentions, beliefs, and estimates. And given that every bet is in some way, an opinion poll, the betting exchange becomes a very useful source of information. The gambling market is dynamic and it reflects the punters’ forecasts and predictions. Lines are moving according to changes and this also reflects how the whole market is moving. 

Opposite to polls which capture the general public opinion at the exact time they are being carried out, betting exchanges give us a continuous flow of information because they are dynamic, as we said before. Polls give us a picture of the past while betting exchanges give us a ‘glimpse’ of the future. Analyzing a poll’s outcome can be updated only to the extent that the survey is taking place every day. It can be easily outdated because we are talking about people’s intentions, which are backed by feelings and we all know how easily can feelings change in politics. 

That’s not what happens with betting exchanges. Looking at how the markets are shaped and how the lines are moving can give us a more precise picture of what people think, what they believe will happen, and what they predict. And since we are talking about elections, it is these people who are the absolute source of information, because they are the voters. 

The Influence of Monetary Investment

And besides the fact that betting exchanges present a more rounded and updated picture of the market, we also need to think about how credible this picture is. The very fact that bettors are putting in their money to this, means that they have some sort of greater confidence than simply responding to answers, which would either way have no implications on the forthcoming elections. When there is money involved, people get more conscious and more consistent in what they are doing.

Polls are often seen as levers for putting pressure on the candidates or the political parties to change their approach. It’s not uncommon to have people respond to survey questions with this in mind. But when it comes to betting, which involves predicting what will happen in the future, there is no such thing getting in the way. Bettors will back what they truly believe is going to happen, based on their assessments, analyses, or any other data that makes them more confident in their decision-making.

So, the answer to the question of whether gambling markets can predict outcomes is yes to a certain extent they can be used as reliable sources of data for making more realistic forecasts.