Unlike for the 2016 election, bookmakers are typically offering odds on wildly improbable outcomes: that the Prime Minister will come from Pauline Hanson's One Nation, the Greens, or even the Australian Conservatives. Bookmakers include such improbable options to maximise profits. And they include these options at odds that overstate the real probability of the next Prime Minister coming from one of those parties. It is an example of a longshot-bias in betting markets.
There appears to be two drivers for the longshot bias. First, punters seem to systemically over-estimate the probability of a longshot outcome. Second, bookmakers can be risk adverse at the very long end of a market. They are often loath to list odds longer than (say) 100 to 1, because the bookmaker carries the risk that the listing could be costly should the longshot come in with a late bet on the longshot.
As I did with the individual seat odds for the 2016 election, to correct for the longshot bias, I am ignoring the over-inflated odds in respect of the minor parties forming government after the next federal election.
My first automated collection of odds, and the implied Coalition win probabilities follows.
| House | Coalition Odds ($) | Labor Odds ($) | Coalition Win Probability (%) | |
|---|---|---|---|---|
| 2018-04-14 | Ladbrokes | 2.50 | 1.40 | 35.90 |
| 2018-04-14 | CrownBet | 2.40 | 1.50 | 38.46 |
| 2018-04-14 | Sportsbet | 3.00 | 1.37 | 31.35 |
The automated collection of odds requires me to write a web-scraper for each online bookmaker. For some bookmakers this is relatively easy to do. However scraping is more difficult with those bookmakers that use JavaScript to construct their web-pages dynamically. It takes time to write bespoke web-scrapers. My go to tools for web-scraping are Beautiful Soup and Selenium.
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