Britons vote on whether the UK should remain or leave the European Union in just six weeks' time but how the vote will turn out on June 23 seems more uncertain than ever.
The most recent Poll of Polls from the non-partisan group What UK Thinks said that the Leave and Remain campaigns were neck and neck: 50/50.
The unpredictability of how the vote will turn out next month has led to the EU referendum becoming a major betting market, too.
In fact, it is on course to becoming the biggest market for a single political event ever, according to Betfair.
Business Insider spoke to Matthew Shaddick, head of political betting at Ladbrokes on Monday, to get an insight into what he believes are the smartest ways to bet on the upcoming referendum.
Firstly, there's the question of how many people will vote on June 23. Given that the referendum is one of the most significant political moments in the country's history, you would think it wouldn't be unreasonable to forecast a relatively large turnout — perhaps higher than last year's general election turnout of 66.1%.
Shaddick, however, told BI that putting money on a surprisingly low turnout would be a wiser move. He told us:
"When the polls measure peoples’ certainty to vote, people tend to over report. Based on that, the turnout is probably going to be somewhere around the high 50’s. Whereas the midpoint of the betting market at the moment is saying around 62%.”
“For me personally, I think an even lower turnout isn’t at all impossible — perhaps in the low 50’s or even less. That’s at a big price, so I would back that as well.”
According to Ladbrokes' latest odds, there's a 2/1 chance that the turnout will be between 50-60%, meaning a successful £10 bet would produce a total return of £30. However, if you were to successfully place the same amount on turnout being under 50%, you would win £80.
There is a variety of ways to bet on the referendum. One smart way, Shaddick said, is to predict how the vote will turn out by country.
"We have Scotland voting to stay but the entire UK voting to leave at 5/2 at the moment. On the other hand, if you were to go the other way around — England to vote to leave but the UK to vote to stay — that’s at 10/1."
Scotland is the most pro-EU part of the UK, according to polling expert Prof John Curtis. Yet, according to recent surveys, there remains a good chance that the entire country could vote to leave on June 23. With this in mind, a successful £10 bet on the Scots voting for UK to remain but the UK as a whole voting to leave would give you a winning return of £35.
If you were to bet £10 on the English voting for a Brexit but the UK as a whole voting for the country to remain, you'd be in line to win a total return of £110. This could be a very shrewd move, as the 10 most eurosceptic places in the UK are in England, according to YouGov. Who is going to win?
We couldn't resist asking Shaddick the question that is on everyone's minds, and he didn't shy away from giving a prediction:
“Personally, I have bet on a relatively comfortable victory for remain — by 10-20 points. In the history of these sorts of referendums, towards the end people usually opt for the safer option, and I think that will be the case this time around too.”
A 10 to 20 point margin of victory for Remain is being offered by Ladbrokes at 11/4. This means that if you were to successfully place a £10 bet on this outcome, you would win a total return of £37.50. If you were to go further and place the same amount on a 20 to 30 point victory for Remain, you would be in line to win £50.
Source: Interview with Matthew Shaddick head of political betting at Ladbrokes - Business Insider