Latest / Bloomberg Intelligence / Picknation's Budin on Why Bettors Got Brexit So Wrong (Audio)

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Picknation's Budin on Why Bettors Got Brexit So Wrong (Audio) · Bloomberg Intelligence

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  Speaker 1: Eleven three l global business news twenty four hours a
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  Speaker 1: from Bloomberg World Handquaters. I'm Charlie Pellett. Stocks plunge the
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  Speaker 1: d R dot org. US stocks joined us sell off
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  Speaker 1: in global risk assets on speculation that the UK decision
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  Speaker 1: to leave the European Union will hamper worldwide growth. Equities
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  Speaker 1: sank to session lows in afternoon trading that now got
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  Speaker 1: Bloomberg business flash. You're listening to taking Stock with Pim
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  Speaker 1: Fox and Kathleen Hayes on Bloomberg Radio. There are analysts,
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  Speaker 1: there are strategists, and then there are bookmakers. Steve Boudden
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  Speaker 1: is the chief executive of pick nation dot com. He's
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  Speaker 1: also the vice president of Gaming Nation and uh Well.
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  Speaker 1: Pick Nation is the world's largest online pay per view
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  Speaker 1: analysis site in the sports handicapping industry. Here to help
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  Speaker 1: us explain what went right and what went wrong in
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  Speaker 1: handicapping the vote for Brexit. Steve Boudin from Miami Beach. Steve,
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  Speaker 1: thanks for being with us. It's so good to be
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  Speaker 1: with you. So we've keep kind of characterizing it is
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  Speaker 1: what did the bookmakers get wrong? But it's not really
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  Speaker 1: the bookmakers correct. It's those people placing the bets. You
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  Speaker 1: know you got it right that you know, it's so funny.
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  Speaker 1: The biggest misconception in the bookmaking business is that every
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  Speaker 1: bookmaker has some Chinese guy in the back room with
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  Speaker 1: a syllabus and a calculator trying to figure out what
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  Speaker 1: the odds of the games are going to be. But
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  Speaker 1: just like any market in the world, the odds are
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  Speaker 1: not determined by the oddsmakers. The odds are determined by
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  Speaker 1: the betters. And for instanance football, the lines come out
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  Speaker 1: the night after the games, with the same night to
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  Speaker 1: the games end Sunday the games and Sunday night the
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  Speaker 1: new lines for the next week come out and those
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  Speaker 1: lines get bet all week long until Sunday, and you
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  Speaker 1: could start every game and pick them, but by the
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  Speaker 1: time it got the Sunday, that line is going to
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  Speaker 1: be the correct line according to the market. So, uh.
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  Speaker 1: The There's a lot of people talking though about how
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  Speaker 1: the bookies got it wrong when it comes to this
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  Speaker 1: political vote, which is not exactly like um, you know,
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  Speaker 1: not a like uh like a sporting event, although I
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  Speaker 1: guess it is. There's a story in the Independence saying
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  Speaker 1: the guy who is the head of political betting at
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  Speaker 1: lad lad Brokes, he just says people were over confident
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  Speaker 1: on Ron remaining. But does this just kind of show
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  Speaker 1: the the folly of relying on something like the odds
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  Speaker 1: the bookies are caring to determine whatever outcome is going
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  Speaker 1: to happen when it comes to America, and in the past,
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  Speaker 1: the bookies have never been wrong in predicting a president. Only,
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  Speaker 1: like I said, saying that like you're the host initially
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  Speaker 1: said and alluded to saying that the bookies predict anything
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  Speaker 1: is just in and of itself disingenuous because it doesn't happen.
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  Speaker 1: The it's the who didn't, who got it so wrong,
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  Speaker 1: or the betters, And I believe the unique scenario here
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  Speaker 1: was there was a genuine disconnect between the people um
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  Speaker 1: in Britain that actually have access to bookmakers and disposable
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  Speaker 1: income to bet with bookmakers and time in their day
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  Speaker 1: to talk to their friends about what they think they're
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  Speaker 1: gonna bet on and then actually go down take time
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  Speaker 1: out of their day to go down to the place
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  Speaker 1: to make the bet. Well, those people all probably we're
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  Speaker 1: going to vote remain because remaining probably helped those people
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  Speaker 1: in life or didn't hurt those people as much. But
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  Speaker 1: the rest of the country, who's hurting and who needs
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  Speaker 1: change and who doesn't like the direction of the country
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  Speaker 1: and it doesn't have the disposable income and the means
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  Speaker 1: and the wherewithal in the mindset to go down and
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  Speaker 1: actually place a bet with a bookmaker and take that
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  Speaker 1: kind of time out of their day for a luxury
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  Speaker 1: activity like that. Well, they're all the people that were
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  Speaker 1: betting out and exit, and they weren't being represented in
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  Speaker 1: the bookmaking vote like they normally are during the soccer
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  Speaker 1: games because they didn't have time to make a bet
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  Speaker 1: on political outcomes. This outcome was much more than just
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  Speaker 1: a bet for them, you know, in their minds, it's
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  Speaker 1: their whole life and livelihood. And I don't think for
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  Speaker 1: the first time, I don't think that that vote was
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  Speaker 1: represented in the betting because those people just don't have
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  Speaker 1: the time to bet. Steve, you bring up an interesting
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  Speaker 1: point because whether it is a sports book or in
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  Speaker 1: this case, betting on a political outcome, it is the
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  Speaker 1: constituency of who is actually part of the event. For example,
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  Speaker 1: if you're talking about a team, you can analyze a
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  Speaker 1: team from the outside, but if you are in fact
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  Speaker 1: part of the electorate, and as you just described, don't
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  Speaker 1: participate in the bookmaking process, it's not as if anything
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  Speaker 1: is wrong. It just means that you don't have a
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  Speaker 1: really decent and coherent sample. Is that accurate? That's exactly correct.
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  Speaker 1: That is exactly correct. In this case, the people that
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  Speaker 1: were betting, we were disproportionately represented. So can you apply
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  Speaker 1: that to other things? So, for example, if you're betting
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  Speaker 1: on other types of events, or indeed on the other
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  Speaker 1: types of sports events, you don't want to really know
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  Speaker 1: about the event. You want to know about the other
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  Speaker 1: who are betting and participate. That's exactly correct. And that's
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  Speaker 1: the difference between what we call in our business knowing
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  Speaker 1: sharp money versus sucker money. And by the way, sucker
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  Speaker 1: is a derogatory term. That doesn't really mean something so derogatory.
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  Speaker 1: It just means that somebody is behind the bookmaker on
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  Speaker 1: the information chain. If the game moves from four to
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  Speaker 1: four and a half, the bookmaker knows it before the customer.
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  Speaker 1: If the customer knows it before the bookmaker, he's a
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  Speaker 1: wise guy. He's not a he's a he's a sharpie.
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  Speaker 1: He's not a sucker. If he knows it after the bookmaker,
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  Speaker 1: he's a sucker, meaning that he's a retail customer versus
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  Speaker 1: a wholet sale customer. You know, if here, but if
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  Speaker 1: very would have been great for people to hear this
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  Speaker 1: conversation before the vote, because it seems to me the
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  Speaker 1: logical conclusion is if you'd realize that there's a very
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  Speaker 1: limited pool of people who might be voting to leave,
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  Speaker 1: who are betting, you could have made money saying Aha,
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  Speaker 1: that's not a great gauge. I'm going to take those
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  Speaker 1: odds right and vote to leave. I could have made
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  Speaker 1: a lot of money. Well, let me tell you something.
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  Speaker 1: As an analyst who makes his money analyzing games before
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  Speaker 1: the game start, I can tell you it is so
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  Speaker 1: much easier to analyze something after it's happened than before
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  Speaker 1: it starts. So in this case we get the luxury
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  Speaker 1: of seeing the cause and effect and then going and saying, Wow,
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  Speaker 1: why did this happen? And that's always a lot easier
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  Speaker 1: to figure out than trying to figure it out before
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  Speaker 1: it happened. Um, and I think in this case, you know,
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  Speaker 1: it's shocked everybody that you know that it was so wrong,
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  Speaker 1: and searching for that answer, we figured out that hey,
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  Speaker 1: wait a second, these people that are voting exit, they're
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  Speaker 1: not being represented in this book making call. Steve Booton,
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  Speaker 1: thank you so very much. We'll look forward to talking
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  Speaker 1: to you again as the presidential racing United States heats up.
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  Speaker 1: The CEO picnation dot Com joining us from Miami Beach.
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