Tue, 13/02/2007 - 2:38pm — dibo

Check it out: Labor now favourites to win with online bookies Sportsbet.

The bookies’ odds are either the true indicator of what’s likely to happen or a way for bookies to wangle wads of dosh from politically minded know-it-alls who don’t know it at all. It certainly goes into our bizarre little category of speculative fact.

Whatever they are, Sportbet now has Labor favourites to win at $1.80 as against the Coalition at $1.95. This implies that the probability of a Labor win is now 52%, and 48% for the Coalition.

They do seem to predict election results reasonably well. Andrew Leigh from the ANU has written at length about the predictive utility of betting odds for elections. Leigh’s stuff is very detailed, and for mine it’s a bit much to read for a casual interest, but he’s come to the firm conclusion that odds beat polls for picking the winner of an election.

OzPolitics has had a series running for ages about betting odds. There are endless graphs and regularly updated odds, and in particular has run a series of weighted average odds to indicate the estimated probability of a Coalition win at the next election.

Against this, it is worth noting that one bookmaker has Labor favourite to win for the first time. The odds have been narrowing sharply since Kevin Rudd’s ascent to the leadership of the Labor Party, but this is the first bookie that’s been prepared to put Labor in front.

It’s only one bookie – Sportsbet, and it comes against the background of the others not moving at all and one even moving the other way, but it’s potentially a psychologically significant phenomenon. It indicates that it’s not a momentary feeling that the Opposition are doing well, but that people are in fact willing to back them in with hard cash.

UPDATE - The SMH reports that Sportingbet have been followed by Centrebet and IASbet. Curiouser and curiouser…