The betting odds in England during the Brexit vote was solidly on the “Stay in the EU” side. Yep, “smart” money was on UK to “Stay”. Lot of people lost big bucks (Pounds?)on that one...including the betting shops. It was a bloodbath for Ireland’s largest bookmaker “Paddy Power”. Go ahead, look it up.
“The betting odds in England during the Brexit vote was solidly on the “Stay in the EU” side. Yep, “smart” money was on UK to “Stay”. Lot of people lost big bucks (Pounds?)on that one...including the betting shops. It was a bloodbath for Ireland’s largest bookmaker “Paddy Power”. Go ahead, look it up.”
On the Monday before the Brexit vote, the odds were 7 to 4 for “leave,” meaning that a 4 pound wager on Brexit would pay out 7 pounds, implying a probability of Brexit of about 36%.
I don’t know Paddy Power’s business model, but if it is a conventional bookmaking operation, how could it lose money on a particular outcome? Betting shops typically adjust the odds dynamically so as to roughly equalize the flow of bets on the two outcomes. This is called “keeping a Dutch book.” In other words, the odds are a “price” which (approximately) equates the supply of and demand for bets on a particular outcome, exclusive of any commissions and “overrounds” (take by the house).