Punters place more bets on Ed Miliband as UK prime minister

Gamblers are starting to favour Labour's Ed Miliband to become the next prime minister as opinion polls show no sign of a decisive swing back to the Conservatives.

However, the Tories remain the favourites to win the most seats, meaning that betting markets are pointing towards a confused and difficult outcome for the UK following the general election.

"Basically, the markets are starting to zone in on the central projections of most of the polls and forecasts, as day by day nothing much changes," says Matthew Shaddick of Ladbrokes.

"So, the Tories have today become even stronger favourites to win most seats (2/5 from 4/9) and at the same time, Miliband has become a stronger favourite to be PM on July 1 [once possible coalition negotiations are over] (8/11 from 4/5). Most projections now point to the Tories winning slightly more seats, but not enough to be able to form any kind of government."

On the Betfair betting exchange, Mr Miliband is being traded at odds that imply a 57 per cent chance of becoming prime minister, while the Conservatives have a 70 per cent chance of being the largest party.

Punters combining polling information, news reports and their intuition are thought by some to be a better measure of election outcomes than the pollsters alone. Betfair claims its punters collectively predicted the result of the 2010 election one month out.

For a while the markets have been more optimistic about the Conservatives' chances than many of the polls and political science forecasts, implying the party would enjoy a late surge.

"[Markets] have historically tended to factor in late stage swings towards the incumbents, hence in this election the Conservatives are trading in a stronger position than the polls would suggest," says James Midmer of Betfair.

Tony Blair's second election victory in 2001 is the ideal comparison for the current race, according to political gambler and blogger Mike Smithson, who believes there may be an incumbency effect favouring the Conservatives.

"Overall, the Labour lead fell back by 3.6 per cent, but that produced only one extra seat for the Tories and the reason for that was a first-term incumbency bonus".

But with the polls failing to move significantly to the Conservatives, punters are shifting towards the opposition, says Graham Sharpe of William Hill, Britain's biggest bookie by number of stores.

"The past week has seen the biggest move from political punters of the general election campaign so far towards Labour success," he says. "And we may soon have to make Mr Miliband clear favourite to be the prime minister as a result of the general election if this run of support continues."

For the first time, William Hill now has David Cameron as odds-against being prime minister on August 1 and the Labour leader as favourite. The bookmaker has the Tories as favourites to win most votes and most seats.

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But as well as offering predictions, political betting is also a prime marketing opportunity for bookmakers, with many offering a bigger range of election bets to more mainstream customers and taking their cut of a growing market.

In 2010, William Hill took in around £1m, while the Scottish referendum last year saw its customers wager £3.5m on the outcome.

With the majority of bets expected in the closing days of the election, 2015 could top that figure as the uncertainty over who will become prime minister encourages punters to have a flutter on the result.

"The election is more complex this time - there are more possible outcomes, so it is a bit easier for the bookies to make money out of it - and it's more interesting for the consumer," said Simon Davies, a leisure analyst at Canaccord Genuity.

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