Bookmakers are strongly backing Anthony Albanese to become Australia’s next Prime Minister, but history suggests such confidence can be misplaced.
As of Friday, Sportsbet had Labor at extremely short odds of $1.06 to win Saturday’s election, while the Coalition lagged behind at $10.50. TAB echoed this sentiment, saying punters had shown “very little confidence that the Coalition can win,” with significant bets this week pushing Peter Dutton’s odds from $4.50 on Tuesday to $10.50 by Friday.
However, past elections have proven betting markets wrong before. In 2019, Scott Morrison defied expectations and pollsters to win a surprise majority for the Coalition. At the time, Labor leader Bill Shorten was heavily favoured at $1.16, and Sportsbet prematurely paid out $1.3 million to Shorten’s backers—ultimately losing over $5.2 million due to the upset.
This isn’t the only example. In the 2016 U.S. presidential election, bookies underestimated Donald Trump, who beat Hillary Clinton despite being the underdog. Australian bookies like Sportsbet, TAB, and William Hill lost millions after long-odds bets on Trump paid off.
There’s ongoing debate over whether betting markets or polls better predict election outcomes. Elon Musk has argued that betting markets are more reliable since they involve real money. NPR’s Keith Romer noted that historically, U.S. election betting markets were largely accurate from 1884 to 1940, getting only one call wrong in 15 races.
Labor MP and author Dr. Andrew Leigh supports this view, stating in his book The Luck of Politics that betting markets consistently match or outperform opinion polls. However, critics warn that betting markets can be skewed by wealthy bettors, with University of Iowa’s Thomas Gruca pointing out that price movements often reflect financial clout more than public sentiment.
