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U.K. Bookmakers Face Divergent Outcomes in Scottish Independence

Britain’s two largest bookmakers agree it’s likely that Scots will vote to remain in the U.K. in a referendum planned for 2014. The difference is which one of them will profit from the result.

The latest odds at both Ladbrokes Plc (LAD) and William Hill Plc (WMH) suggest more than a 60 percent chance of keeping the status quo. Should that outcome prove correct, almost 90 percent of stakes at Ladbrokes would be on the losing side, while at William Hill the majority of bets would pay out, based on wagers placed so far, according to spokesmen at the companies.

“So far about 4,000 pounds ($6,500) to 5,000 pounds have been wagered, which is more than expected for a small politics market like this,” Ladbrokes spokesman Alex Donohue said in a telephone interview on Dec. 20. “By the time of the referendum, it could reach six figures.”

Popular support for independence, the flagship policy of the Scottish National Party that runs the semi-autonomous government in Edinburgh, has been falling this year.

The proportion of people wanting to keep the status quo increased to 58 percent, while backing for independence fell to 30 percent of respondents, according to an Ipsos MORI survey in the London-based Times newspaper on Oct. 18. The 28 percentage- point gap compares with 20 points in June and 11 points in January, based on reports from the same pollster.

Betting Odds

William Hill is offering odds of 1-3 on voters rejecting independence, meaning a bet of 3 pounds would win 1 pound plus the stake, and 9-4 on Scottish First Minister Alex Salmond winning the referendum, spokesman Graham Sharpe said.

While most people using the bookmaker backed Scotland staying in the U.K., the lion’s share of the bets won’t be placed until nearer the time, Sharpe said by telephone.

Ladbrokes is offering odds of 5-2 for Scotland winning independence. It’s offering odds of 2-7 in favor of Scotland remaining part of the U.K.

Ladbrokes and William Hill, both based in London, have more than 2,000 outlets in the U.K. The volume of bets in favor of independence forced Ladbrokes to suspend betting for a time this week and recalculate the odds, Donohue said.

At the time when British Prime Minister David Cameron and Salmond agreed the terms of the referendum in October, Ladbrokes offered 4-1 for a “Yes” vote and 1-8 for “No.” Betting support for independence may be a combination of patriotic Scots and people placing a small stake looking for an upset to boost their return, Donohue said.

Most of the wagers placed with Paddy Power Plc (PWL), a Dublin- based bookmaker, are also for Scotland to leave the U.K.

Paddy Power has taken about 10,000 pounds in bets since June 2011, with 60 percent of it for a “Yes” vote, spokesman Féilim Mac An Iomaire said. The Irish bookmaker shortened the odds to 5-2 for independence from 7-2 in August and lengthened the odds on the status quo to 1-4 from 1-6.

To contact the reporter on this story: Peter Woodifield in Edinburgh at pwoodifield@bloomberg.net.

To contact the editor responsible for this story: Rodney Jefferson at r.jefferson@bloomberg.net

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