EU referendum: There may have been a record amount of betting on Brexit vote – but is it that impressive?
The EU referendum has caught the betting world by storm.
After the failure of the pollsters at last year's general elections, politics watchers have been broadening their horizons to try to understand who has the edge in the campaign.
Of course, the betting markets themselves move in response to opinion polls, but discussions about polling methodology, sample sizes, peripheral questions and potential turnout have taken on renewed intensity and a fresh importance.
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The total amount waged on Betfair's exchange passed £62m by early afternoon – the largest ever for a single political event in gambling history, ahead of the 2012 US Presidential Election which hit £40m.
Big numbers.
Or are they?
While talk about betting on the EU referendum has been dramatically hyped up – almost to the point you would think this was the biggest event ever – political betting is tiny compared to the more traditional flutters on sports.
William Hill, for instance, expects all of the fixed odds gambling companies to make a total of £20m from the EU referendum. That compares to a total revenue at William Hill of £1.6bn in 2015, another £1.5bn at Bet365 and £1.2bn at Ladbrokes. Even if every penny of that income went to just those three bookies, it would still account for under 0.5 per cent of last year's income.
An amazing £12.3m wagered on Betfair's #EUref market alone in past 24 hours
— Mike Smithson (@MSmithsonPB) June 23, 2016
Moreover, compare the EU referendum – a campaign which has been rumbling for months and a betting market which has been live for more than 12 months at some places – with some other, fairly standard, gambling events.
Ladbrokes' Alex Donohue told Morning Wire the England v Wales match at Euro 2016 – one single 90-minute game last week – took more the double the referendum market has over the space of months.
"We still take more on one major football match that we will on the referendum … racing and football is our bread and butter, and politics accounts for a tiny fraction of our turnover and profit overall."
He added that the in-play markets alone – those which allow you to bet after a football match has kicked off – accounted for more on a typical match day than the EU referendum.
Read more: What the polls aren't telling you
Looking at Betfair, which tracks total amount staked, rather than revenue taken, the referendum, with £60m, does feature highly on some of their best performing markets – but it's hard to say this single event will be funding much more than a few extra rounds at the Christmas party.
A record £101m was traded on a New Zealand vs. Australia cricket match in 2015 – but cricket tends to see a lot of the same traders moving in and out of positions as games edge back and forth, much like a referendum campaign. For England v Russia at Euro 2016, where there is less backing-and-laying, Betfair saw £38m matched on that market – 61 per cent of the referendum total. That was only one of three games being played that day.
The referendum, then, is clearly big news for political betting. But it barely registers as important to the industry's bottom line, who rely on the staples of big sporting events to bring home the bacon day-in, day-out.