Today’s headline betting markets have remained relatively stable, with Betfair volatility and a small move in Centrebet pushing the aggregate ALP implied probability up 0.7 points to come in at 74.8%.
Before we take a look at the Sportsbet individual seat markets, the usual charts come in like this:
Over the last two days, there’s been some movement on the Sportsbet individual seat markets, and with a few exceptions, it’s mostly involved the probabilities running towards the favourite in each seat. If we look at the implied probabilities for ALP victory in the 50 most tightly contested seats (as defined on Tuesday by the Sportsbet markets) – for both Tuesday the 17th August and today – as well as look at the change in those probabilities over the period and the nominal ALP two party preferred of each seat we get (click to expand – the first is NSW/Qld and NT seats, while the second is SA, Vic and WA seats):
As of Tuesday, the ALP were ahead in 76 seats, the Coalition ahead in 70, the independents had 3, while the Greens had 1.
Today, the Sportsbet has Bennelong moving across into the Coalition column, while Solomon in the NT has the ALP dropping below the 50% mark to come in on 49.4% – but still ever so slightly being ahead of the Coalition candidate who sits on 47.9%, while the “Any Other Candidate” option in Solomon makes up the difference with 2.7%.
As you can see, there was a fair bit of movement in a great many of these seats and if we run a scatter plot of the current probabilities against the change in those probabilities since Tuesday – it tells the story:
As you can see – the seats sitting above 50% generally moved further towards the ALP while the seats sitting below 50% generally moved further away from the ALP. Effectively, nearly all of the seat probabilities are running towards the favourites at the moment – which is to be expected as time is uncertainty in these markets. So as the time remaining until the election reduces, the likelihood of events occurring that could substantially change the perceived outcomes in these seats *also* reduces.
Yet, this washing out of uncertainty also means that should something occur, or should some new piece of information enter the market for some seat that is counter to the prevailing wisdom, the seats will move much more than they would have, say, last week when there was much more uncertainty (read “fat”) built into the prices accommodating such possibilities.
That’s why we see fairly significant movement in the seat markets in the last few days regardless of what happens. If nothing happens, the seats run to the favourite – if something happens, they move substantially the other way.