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Weekend's U.K. Political Drama May Be Best Viewed Through Bookmakers


As the continuing Brexit drama spills over into the weekend, investors can look to an unusual gauge of what lies ahead: the bookmakers.

U.K. bookmaking chain Ladbrokes puts the chances of Mr. Johnson winning Parliament’s backing at 50%, and the odds of the U.K. seeking an extension and remaining within the EU past the Oct. 31 deadline at about 59%.

“The logistical difficulties of getting this done haven’t changed,” said Matthew Shaddick, head of political betting at Ladbrokes. “You’d still have to get this through Parliament, translate it into a million languages and get it ratified by the end of the month by the EU.”

The betting market can be a key gauge of sentiment in the next stage of the Brexit saga, with financial markets largely closed while the nail-biting developments play out on Saturday.

Those “having a flutter”—or placing a small wager—are looking further into an array of political outcomes, reflected in the range of bets made at U.K. bookmakers. The outcomes on the table include the possibility of another referendum, the timing of the next general election and whether Mr. Johnson could win the election.

The odds of the U.K. leaving the bloc without a deal by the end of the month are at about 11%, according to Ladbrokes. The chances of the current draft accord getting through Parliament with a majority of 10 votes or more are at 22%.

After weeks of contentious debate, the U.K. and EU struck a compromise on Thursday intended to ensure a physical border doesn’t appear on the island of Ireland, the main sticking point in past negotiations. Getting his deal through Parliament remains complicated, with his predecessor failing three times.

European Union and U.K. negotiators agreed on a draft Brexit deal, paving the way for a crucial vote in the U.K. Parliament. Investors are bracing for sharp movements in markets as the political drama builds. Photo: Francisco Seco/AP

Mr. Johnson’s minority government needs to win the backing of hard-line euroskeptic lawmakers from his Conservative Party, rebels he broke with weeks earlier, and the opposition Labour Party. A political party from Northern Ireland already has said it won’t support the deal.

However, a gulf exists between financial markets and betting groups, caused by the differing interests of investors and punters, as betters are called in the U.K.

The sterling has gained over 2% against the dollar over a week of volatile trading as investors weighed whether the U.K. would avoid a disorderly split from its largest trading partner.

But bets on the currency seem too narrowly focused on the minute-to-minute developments surrounding Brexit for some investors.

“At some point, the focus moves away from that and says: we’re leaving the EU, probably with a deal, and what next?” said Bill Dinning, head of investment strategy and communication at Waverton Investment Management. “Well, if there’s an election, what are the odds of Johnson winning?”

Ladbrokes currently puts the chances of there being no overall majority in the next general election at 50%, of Mr. Johnson’s party winning a majority at 38%, and of the opposition Labour Party winning a majority at 7%.

hat is not to say that the betting market is a reliable gauge of what lies ahead. U.K. bookmakers, like pollsters and most of the financial-services industry, failed to predict the outcome of the Brexit referendum in 2016. And some people point out that the odds on the betting market don’t represent broad public opinion.

“If you get one or two big players putting on a lot of money, you start to distort the odds,” said

Peter Dixon,

a senior economist at Commerzbank.

In fact, the protracted Brexit saga has posed fresh challenges for the U.K. betting industry. Public interest in the U.K.’s divorce proceedings has faded since the 2016 referendum as fatigue set in following the seemingly endless negotiations and repeated delays. Punters are currently putting five times as much money on next year’s U.S. election as they are on the coming Brexit vote, according to Joe Lee, head of politics at

Paddy Power Betfair.

Crafting questions for punters to bet on has also proven tricky, given that much of the political debate has focused on technical issues.

“We have difficulty on our end understanding the minute details and technicalities behind the bills—the border, the deal, the no-deal—and that poses a problem for us from an odds standpoint and from a demand standpoint,” said Mr. Lee.

Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com

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