The Betfair Prof / Leighton Vaughan Williams / 02 April 2008 /

Prediction market expert the Betfair Prof, better known as Professor Leighton Vaughan Williams, takes us through the weird and the wild of the latest poll on the London Mayoral election. What does it all mean for prediction markets and betting? Read on...

We've heard of 'Punch and Judy' politics but a survey question commissioned by Betfair of 1,000 London voters, published this week, goes one step further and asks the electorate who they think would win a fist fight between Boris Johnson and Ken Livingstone.

The answer given is the same across most age groups and by both men and women. About 57% think Boris would pack the knockout punch while 43% think Ken would flatten the blonde brawler. Whether Boris' advantage in the fisticuffs stakes translates into the fight for votes is less clear, however. In the poll, conducted by 72 Point, Ken edges ahead by 36% to 34% in expressed first preference votes, an almost identical margin of preference for the incumbent when asked who would manage London better in the run-up to the 2012 Olympics (32%, to 29% for Boris). Regardless of preference, Ken Livingstone leads his Conservative challenger by a full eight points when voters are asked who they think will actually win, regardless of their own preference.

Yet the Betfair prediction market tells a different story, giving Mr Johnson at the moment slightly more than a two in three chance of winning next month's contest. On this evidence there is something of a disparity between what Londoners are saying in this survey and what those betting in the prediction markets seem to be saying. Partly this is because some other surveys of opinion are painting a somewhat rosier picture of Boris' prospects. More generally, though, public opinion polls provide just one part of the jigsaw puzzle, whereas the prediction markets assimilate all the available information, including private polls, canvassing returns and inside information generally.

To this extent it's a case of 'follow the money', inasmuch as those who know the most, and are good at processing the available information are likely to bet the most. At least that's the theory and the evidence of history seems to suggest that the theory is right.

So what do we know at the moment? Basically, that Boris has a better chance than Ken of winning the forthcoming election, and both have a better chance than the Liberal Democrat Brian Paddick (1.5%), who in turn has better chance than Sian Berry (greater than zero, just!). Having said that, there's still a month to go and perceptions can change. The Betfair survey shows clearly what some of these perceptions currently are. Fist fights aside, 32% would prefer to be stranded on a desert island with Boris Johnson compared with just 20% each for Ken and Sian, with Brian trailing. More pertinently perhaps, the current Mayor leads his main challenger by a full 10 percentage point when Londoners are asked who they think is most likely to keep their election promises.

To put the whole thing into some perspective, though, it's interesting to note that when asked which London-based celebrity they would choose for mayor, Gordon Ramsay won by a landslide. He won among men and women and across all age groups bar the over-70s, who plumped instead for Prince Harry!

So it's going to be either Boris or Brian or Ken or Sian. If you've got a vote, why not use it? And even if you haven't, why not bet on it?

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