Andrew Testa / The New York Times
Thursday, June 23, 2016 | 2 a.m.
LONDON — Ask for his opinion, and David Howe eagerly tells you how he hopes Britain will leave the European Union.
“We need to take control of our borders,” he says.
But these sentiments are, at the moment, as valuable to him as his personal views on Her Majesty’s latest hat. He is more keen to know how the rest of the British electorate is inclined so he can win some money.
Howe is standing inside a William Hill gambling shop near Westminster, home to the British Parliament. It is midday Wednesday, less than 24 hours before British voters will go to the polls to determine the political geography of Europe. Video roulette machines flicker behind him. Televisions above him beam in dog races from hither and yon.
A single screen attracts Howe’s interest: one showing the odds on the so-called Brexit. They have in recent days tilted heavily toward Britain sticking with the European Union. A bet of 9 pounds to remain (about $13.24) fetches a profit of only 2 pounds (less than $3). By late afternoon, the odds slide even more, showing an 80 percent chance that voters will maintain Britain’s place in the EU.
Far from a curiosity, the gambling markets stand as a rare source of something approximating clarity in the face of Brexit-borne confusion, assuming they turn out to be right.
Political polls have generally shown a divided electorate. Until last week, when a member of Parliament who had advocated remaining in Europe was murdered, a vote to leave seemed marginally likely. Investors absorbed polls and sent markets on a wild plunge, selling the British pound and London stocks in anticipation of a Brexit. Then those markets jumped when the polls edged back toward remain.
All the while, gamblers held firm, signaling faith that economic concerns would ultimately triumph over the politics of identity. While the margin tightened for a while, the people voting with money concluded that the electorate would stick with Europe.
In much of the world, the prospect that Britain will really walk away from Europe has generated unease. The vote alone has unleashed troubling uncertainty through world markets as traders, businesses and policymakers struggle to anticipate what might happen.
But in one corner of the commercial world — the gambling industry — not knowing what will happen amounts to an exploitable asset. To bookmakers, uncertainty is the midwife of all wagers. Brexit presents the perfect swirl of unpredictable forces: a potentially grave geopolitical risk that has provoked fratricide in Britain’s ruling Conservative Party, dominating news coverage. Everyone is paying attention. No one knows how it will end.
“The betting is just massive,” says Mike Smithson, founder and editor of PoliticalBetting.com, a website that is something like a Bloomberg terminal for people who wager on political events. “It’s the biggest political betting event of all time, anywhere.”
On Tuesday and Wednesday alone, the Brexit vote attracted wagers worth more than 3 million pounds, most of it via online transactions, and three-fourths landing on remain, Smithson estimated.
This is the picture that confronts Howe, 44, a chef at a nearby pub, as he enters William Hill Wednesday afternoon, aiming to use Britain’s referendum to earn some cash.
“I think it will be remain, but the odds are crap,” he says.
Hoping for better odds, he resolves to wait before making a bet sometime in the next few hours. He might bet in accord with his heart — to leave — given the financial appeal. A bet for Britain to abandon Europe is offering the gratifying returns of the long shot, a profit of 3 pounds for a 1 pound bet.
“I like to mix it up,” Howe says, recounting how he just managed to collect on a complex bet involving the European soccer championship: Germany won, Poland won, and Spain and Croatia both scored goals, combining to trigger his payout. “If there’s no horse I like or football I like, then I’ll put a tenner on leave.”
William Hill, the largest bookmaker in Britain, assumes the industry will collectively count wagers reaching 20 million pounds before the Brexit results are in, according to a spokesman, Graham Sharpe.
The company is hopeful its tally will eclipse the 3.25 million pounds in wagers it saw during the last giant political referendum, the 2014 vote on whether Scotland should leave the United Kingdom. In that case, the polls had the race too close to call while the gambling markets got it right: Scotland stayed.
Lest one get the impression that Las Vegas ought to reserve dedicated space for the workings of British democracy, it is worth noting that these numbers are paltry compared to the behemoths of British gambling: soccer and horse-racing.
William Hill estimates that the bookmaking industry will rack up wagers of 500 million pounds on the European Championships. A World Cup final alone tends to attract 200 million pounds in wagers to William Hill’s books.
Part of the reason betting on politics is so tiny compared to sports stems from a fact that may shock in this age of Trump-Clinton-Brexit-yakety-yak-saturation: There is not enough politics to sate the bookmakers.
“In betting terms, there are relatively few events,” Sharpe says.
While political betting may be a mere niche, it goes back centuries. As far back as 1503, Roman banking houses offered trades predicting who would emerge as the next pope from the papal conclave, according to Leighton Vaughan Williams, director of the betting research unit at Nottingham Business School in England.
From the U.S. Civil War through 1940, Americans were placing bets on the presidential election on stock exchanges, a practice that consistently favored the eventual winner.
“People trading in the betting markets are looking at all the information that’s available,” Vaughan Williams says. “The polls are only one thing. The people who trade in the betting markets are looking at all the information.”
Ironically, the glimpse of certainty emanating from the betting markets may be limiting the appeal of wagering on Brexit.
As Ingrid Sambade arrived at the William Hill shop Wednesday morning, she was eager to put her money where her heart is — with Europe. A Spaniard by birth, she makes her living cleaning homes.
“I’m in!” she says. “If they go out, they can’t come back in, so the best thing is to stay in and everyone will be happy.”
But Sambade, 69, was less happy when she calculated the skimpy winnings she will claim from a successful remain bet.
“It has terrible value for you,” the man behind the counter tells her. He suggests she focus on more speculative questions, like the margin of victory and the size of turnout.
“I don’t bet nothing,” Sambade says. “It don’t give you much.”
Colin Hammond takes one look at the board and concurs.
“I think they’ll stay, and there’s no value in that bet,” he says, before turning his attention to his traditional area for wagering. “I know more about football.”