What the Betting Markets Tell Us about the Upcoming US and UK Elections

Anthropologist and ISRF Fellow Anthony Pickles explains how political gambling is a useful tool for understanding elections.

Adam Smith

Feature Image in public domain (via Pexels)


This article was written by a team member of Universal Impact.


The ongoing scandal around senior Conservatives allegedly putting money on the date of the upcoming UK general election has highlighted the relationship between politics and gambling.

Anthony Pickles is an expert in this area, focusing on the phenomena of political gambling, both in the UK and US.

The University of Birmingham academic – and former ISRF Fellow – says political gambling lets him look at how “people think about predicting the future through the lens of the market and the desire to make profits”.

He explains how political gambling has history in the UK, while the US election has become the biggest betting event in the world – with the total amount bet doubling during every presidential race this century.

Here, the political and economic anthropologist – whose work has been supported by the Independent Social Research Foundation – gives some tips on what to look out for during the current election cycle.

Speaking on 6 June, 2024, he explained why Donald Trump’s conviction for falsifying business records had yet to dent his odds and who the favourites are to be the next leader of the UK Conservative party.


WHAT ARE THE MAIN THINGS YOU ARE CURRENTLY LOOKING OUT FOR IN THE MARKETS?

Firstly, the outcomes seem relatively concrete and set.

In the US, it’s been clear for a long time that it was going to be Trump versus Biden.

In the UK, it’s been clear for a long time that Labour are very likely to win the general election.

The response in gambling has been to turn to more particular kinds of markets.

You can vote on Conservative MPs defecting to Reform UK, voter turnout, how many seats the Conservative party will lose, how many they’ll have left, the percentage of the votes. All these kinds of things in minutely narrow bands.

There’s lots and lots of different possibilities and it’s become much more granular and specific.

This is the kind of thing that happens when political betting becomes more mainstream and has a lot more money in it. When it has more money in it, the betting companies basically try to open up the market.

This means people who gamble on politics can build up a portfolio of investment that allows them to be more cautious or more adventurous, because there are so many different options.

For example, I could hedge my bets on Labour party vote share versus number of seats.

By using these things in conjunction with each other, political gamblers are taking the form of financial investors.

WHAT ARE THE MAIN THINGS THAT THE BETTING MARKETS ARE SAYING ABOUT THE UK ELECTION ON JULY 4?

A Labour majority government has been predicted by the gambling markets since before Liz Truss became UK prime minister in September 2022 and before there was that second drop in polling for the Conservatives.

Now, basically all of the uncertainty has been drained out of the market and you’re looking at very little opportunity to make money betting on a Labour win.

The gambling markets are quite aligned with some media predictions of a Conservative wipeout and an ‘extinction level event’.

There’s no sense in the betting markets that the Conservatives could ever turn this around.

All the debates, the campaign, none of these appear to be consequential in terms of the likely outcome of this election.

The only thing that seems to matter for the betting markets is the impact of Reform UK, the return of Nigel Farage to frontline politics, and the scope for that squeezing the Conservative vote and reducing their seats even further.

WHAT’S THE UTILITY OF POLITICAL BETTING MARKETS WHEN THE RESULT OF AN ELECTION SEEMS LIKE A FOREGONE CONCLUSION?

This is an interesting election for the UK because the outcome seems inevitable but the transformation that it’s going to bring is epoch defining.

The Conservatives face potential losses much larger than they’ve ever faced before.

We’re also looking at a variability in seats that we’ve never seen before, which has further implications for how variable and reactionary the public and their voting strategies are likely to be longer term.

Even if Labour were to get a 250-seat majority, it seems possible this could be wiped out at the election after this one – the Conservatives are hated now, but Labour aren’t particularly loved.

It’s changing the landscape of politics and that means that some of the outcomes in the betting markets are quite unknown because of the level of transformation we’re looking at.

For example, how resilient is the UK’s first-past-the-post election system and the relationship between individual MPs and their constituencies when you’ve got such a wave of change in terms of voting behaviours? And are we any good at polling that change?

One of the reasons political gambling has something to say about elections like this is that it throws our attention forward all the time.

We know that we’ve got a kind of foregone conclusion, but we don’t know exactly how it’s going to turn out. For example, political gamblers are thinking about who’s going to be the next leader of the Conservative party.

But if there’s fewer than 100 Conservative MPs remaining, who’s left in parliament that could potentially take that role? And where does that throw the direction of politics after that?

So it provides a useful inflection point for news media and other kinds of thinkers to make the election interesting and consequential.

AND WHAT ARE THE MARKETS TELLING US ABOUT A POTENTIAL UK CONSERVATIVE LEADERSHIP CONTEST AFTER THE ELECTION?

Because the markets are kind of predicting a Conservative annihilation that could lead to many of the main leadership contenders not being in parliament. Currently, the favourite is Kemi Badenoch, she’s in a very safe seat whereas Penny Mordaunt could lose her seat quite easily. Priti Patel is in second. Tom Tugendhat and James Cleverly are relatively safe, and they represent the option for trying to reoccupy the centre ground of British politics.

The one to take note of, eight from top, so not that far down, is Nigel Farage. He’s at 13/1.

So that’s not likely but such is the level of chaos that is being predicted after the UK election, that if Nigel Farage is in parliament, he is currently 13/1 to take over the Conservative party.

AND WHAT ARE THE MARKETS TELLING US ABOUT THE US ELECTION AT THE MOMENT?

The odds suggest Donald Trump is in prime position, although it’s still relatively even.

You have to be a bit careful with the US because the political bent of people who gamble on politics plays out in the odds you get.

It’s well described that, in the US, political betters tend to lean right and tend to overestimate the chances of the right, whereas in the UK, they tend to be in the centre or a little bit to the left.

So while the betting markets are saying that Trump is the more likely to win, from a personal standpoint I’m very sceptical.

This is partly because the markets don’t seem to be reacting to the fact that a conviction from a US court is likely to actually change people’s minds in a way that few other things cut through.

Also, Joe Biden has achieved quite a lot in terms of economic success and legislative reforms.

I was really looking out for the effects of this conviction but they have not moved the markets yet.

Joe Biden’s odds actually became slightly longer over the course of a couple of days, which surprised me quite a bit.

People think Donald Trump is able to cut through to the public directly, and is this kind of ‘Teflon Don’ which means none of this stuff sticks to him in the way that it sticks to Joe Biden.

IN TERMS OF THE COMPARISON WITH SPORTS BETTING, IS THE POLITICAL EQUIVALENT OF MATCH FIXING SOMETHING WE NEED TO WORRY ABOUT?

It’s well known that people bet on themselves to shorten their odds and appear like more credible candidates.

It can be a relatively cheap way of campaigning or achieving some kind of campaign win. But as these markets grow, it becomes less and less valuable as a tool.

When a market starts up, you can potentially influence it, and get a news story going, but the market will quite quickly react and take all of that money and run.

OVER TIME, COULD POLITICAL GAMBLING BECOME SO WELL ESTABLISHED THAT IT STARTS TO INFLUENCE PEOPLE’S VOTING BEHAVIOUR?

It’s an interesting question, because the whole premise of gambling on things in the world, is that it’s secondary, it exists on a layer above what’s actually happening.

In a conceptual sense, it can’t really work as an activity if it stops being that. If the machinations become the goal, then the market loses its credibility, or so those involved in political gambling have intimated to me.

I would say that in political gamblers’ eyes the market self-regulates itself towards not having that much of an influence on the object it’s trying to predict.

But the US is a lot more concerned about the influence of political gambling on politics than the UK.

Basically, it’s one of the oldest recorded forms of gambling in the UK and it’s been permitted for donkey’s years.

But in the US, they’re concerned about financial trade influencing elections. And that is a concern that keeps it kind of underground and makes it seem kind of a little bit distasteful to people, and maybe it is a bit distasteful in some circumstances.

We don’t bet on wars, we don’t bet on life and death situations generally, in part because of the moral bad news story that that would bring, but also because the incentives to manipulate a market become far greater in life and death situations.

As our politics becomes more serious, the gambling side of it becomes less important. So in a way, it requires that our politics is relatively frivolous.

I WAS GOING TO ASK WHAT POLITICAL GAMBLING TELLS US ABOUT THE NATURE OF CONTEMPORARY POLITICS

It’s like the larger financialisation of lots of things.

It breaks politics down into a kind of game, but it also holds out this promise that doing that is going to lead to some kind of better understanding.

As long as we collect enough data, as long as we work together to create these markets, we will have these fantastic prediction tools that can help us to understand what’s likely to happen.

Maybe even you’ll be able to sort your finances out in a way that means that you’ll be protected from the most dire of those consequences.

At the same time, there are large and data-driven actors in these markets who are working hard to prey upon people’s willingness to engage.

So, at both levels, it kind of rips away at any kind of sense that politics is accessible or valuable in its own right.

It draws it into this larger cultural shift towards everything being a kind of digital labour activity.

This is my own speculation rather than anything I have direct evidence for. But to me it speaks to the general malaise that people have towards politics.

It’s a way of rationalising and coming to terms with the lack of consequence of elections.

It’s a tool for people to approach elections as distant from oneself, as secondary.

You’re one layer removed because you’re just trying to work out how you’re going to make money, applying a dirty realpolitik view of the world as a pill that helps you deal with the fact that the political change that many people, both on the right or on the left, want to see is unlikely to happen.

SO WHERE DO YOU SEE POLITICAL GAMBLING GOING OVER THE NEXT FEW YEARS?

The thing to look out for is the use of artificial intelligence to model betting markets – this could see humans competing with AI to attempt to predict future events.

Sports is very, very difficult to beat the markets on. I know quite a few professional gamblers, they have their ways and means, they have great tools at their disposal.

But with political gambling, you have to understand the politics in a way that it’s very difficult for AI to get close to. So in a sense, it’s the least susceptible to manipulation and datafication, which is why it’s one of the kinds of gambling that is most favoured by professional gamblers, because the value that they can get out of it is much larger.

You’re looking at a 5% return on your stakes in sports betting, but in political gambling it could be 30%, 40%, 50%, just depending on how much you understand it.

So in a way, it sets itself up as a kind of an alternative to the kind of data, AI-driven way of understanding, predicting and modelling the future.

It’s therefore perceived by some to be quite a potentially potent tool alongside these computer-generated forms of thinking.

AND WHAT’S NEXT FOR YOU?

I’m super grateful to the ISRF for giving me some money, which is how this project started – it didn’t exist before then.

So I was bought out for about 60% of my time for a year in 2022, which is most of my ethnography.

Then I basically changed jobs, moved to Birmingham and have been really focused on teaching for nearly two academic years.

Now I’ve been lucky enough to get a grant from the British Academy to give me a year of buyout from teaching to write a book I am calling ‘Through Gamblers’ Eyes: Politics as Gambling’. So I’m going to be covering these two elections.

After writing a few short pieces [here and here], I have been consulted by a number of news outlets and even appeared for a live television interview on Sky News.

I’m going to the US in a few weeks to talk to prediction market people and do some kind of event with the Star Spangled Gamblers podcast team. And I’ll be going back to the US during the peak election season.

Then I’m just going to be sitting down to write this book with the idea that I can get it out in a way that makes it a little bit timely, rather than speaking to events that feel like the distant past.