Bets taken on the outcome of the upcoming general election are expected to hit all-time highs, with a hung parliament the most likely outcome, according to the boss of Betfair.
The betting exchange’s chief executive, Breon Corcoran, revealed yesterday that £2.2m has already been wagered on the company’s exchange, with 30,000 customers set to make an expected £40m worth of bets before 7 May.
He said: “Election betting activity will be much higher than five years ago, and our exchange was so accurate predicting the outcome of the Scottish referendum – when we called it early – that we expect a similarly accurate outcome in the general election.”
There has also been a steady flow of punters betting that there will be a second election during 2015 due to a weak government being formed, with odds of 7/2. A hung parliament is the runaway favourite, with the Conservatives odds-on to claim the most seats at Westminster.
The Chief Secretary to the Treasury, Danny Alexander, is the most likely high-profile politician to lose his seat, according to the odds.
The predictions come as Betfair revealed that revenues jumped by 20 per cent to £114.6m in the three months to the end of January – the fourth consecutive quarter of double-digit growth. Underlying pre-tax profits increased by 17 per cent to £23.6m during the period.
The strong growth prompted the company to raise full-year profit expectations by 15 per cent, helping the share price soar 17 per cent, or 319p, to 2,105p. The shares have gone up by about 60 per cent this year.
Betfair took a smaller hit than high-street competitors from the new tax on online betting that was introduced in December, which cost it about £7m over the quarter.
High-street bookies are also facing higher taxes on betting machines in stores. Betfair, however, operates without retail outlets – as an online exchange that allows punters to bet against each other.
Mr Corcoran added that bets through its mobile app had been particularly successful, with 80 per cent of UK customers placing bets on their smartphones.
He said: “There’s a little bit of second screening, with people watching and playing with their phone at the same time.”
Analysts at Jefferies raised their profit forecasts to £116m, adding: “Betfair achieved a total shareholder return of around 50 per cent in 2014, against the traditional bookmakers which were all in negative territory. We expect this outperformance to continue.”
Next week’s Cheltenham Festival will be the key to Betfair’s year, they added. There is no big football competition during the summer and it will be the last outing for the jockey AP McCoy.