Campaigning is now officially under way for the Victorian state election, to be held on 24 November. It’s fair to say that it hasn’t aroused a huge amount of excitement so far, partly because getting any sort of sensible media coverage for state politics seems to get harder every year.
But there’s a general expectation – which, for what it’s worth, I share – that the Labor government of premier Daniel Andrews will be returned for a second term. The Poll Bludger’s tracking of opinion polls shows Labor on 53.3% (two-party-preferred), a swing of 1.3% in its favor since the 2014 election.
But I thought this would be a good time to look at what the betting market is saying about the election, and particularly at what (if anything) we can learn from the market for individual seats. Sportsbet has a full market for each of the 88 lower house seats, which are currently held 46 Labor, 38 Coalition (30 Liberal and eight National), three Greens and one independent.
The first thing to be said is that there’s very little change expected. The incumbent party is the favorite in 87 of those 88. The odds tip only one seat to change hands: Brunswick, which the Greens are narrowly favored to take from Labor.
The second thing is that there’s also very little movement in the odds themselves. Since I first looked at these, just on four weeks ago, 71 seats have shown no movement whatever in their prices. Many of those 71 are safe, but by no means all; the list includes such key Labor marginals as Cranbourne, Eltham and Albert Park.
Now, that could mean that whoever set the odds in the first place did a really good job, so that the flow of money since hasn’t changed the picture. But it’s much more likely to mean that the markets have attracted very little interest, with not enough at stake for Sportsbet to reconsider its settings.
Which in turn is a reproach to commentators who turn to the betting market as a better guide than the opinion polls. The reality is that most election betting consists of small numbers of people risking small amounts of money, and mostly relying on the polls themselves anyway.
That said, however, the odds are not without interest. The third thing about them is that such movement as there has been is almost all Labor’s way. Most obviously, in the four critical Frankston-line seats of Bentleigh, Mordialloc, Carrum and Frankston: last month the Liberals were favorites in all bar Mordialloc, but now Labor is favored in all four.
Those three are the only seats where the favored candidate has changed, but Labor has also improved in several of the opposition’s marginals (Ripon, Morwell, South Barwon, Mount Waverley) as well as its own (Yan Yean, Mulgrave, Oakleigh). The only seat where its chances have dropped noticeably is Pascoe Vale, under threat from an independent, where the implied probability of a Labor win has gone from 84% to 79%.
Punters now also give Labor a better chance of taking Prahran from the Greens, although with an implied probability of 23% they’re only third behind the Greens (50%) and Liberals (37%) – despite a somewhat dubious opinion poll last week putting Labor ahead.
If the odds are to be believed, a lot of these seats are still very close. Seven of the seats where Labor is ahead give it less than a 60% chance of winning, and another ten are between 60% and 75%. If the opposition can get some traction, the opportunity is certainly there for it to win or at least to force Labor into a minority position reliant on the Greens.
But the odds probably shouldn’t be taken too seriously. Not only are the markets very thin, they probably exaggerate the underlying unpredictability. As I remarked many years ago (so long ago that I can’t find it in the Crikey archive; the date is 14 December 2007 if you want to search), “A horse race is a random event in a way that an election is not; it’s much easier for things to go suddenly and unpredictably wrong for even the most fancied runner.”
Upsets do happen in elections, but not nearly as often as people think. In a bit over three weeks, we’ll know if Victoria is one of them.
And if you choose to play around with some of these markets yourself, please bet responsibly.