British bookies mark "high-profile miss" as Trump calls victory - WSJ

According to the Wall Street Journal, British bookies sustained large losses in the wake of record bets on a Donald Trump election victory, in another high-profile miss for this industry.

Because political gambling is illegal in the U.S., some Americans have placed their bets in the U.K., bookmakers say. Americans living in the U.K. and British people acting on behalf of U.S. friends and relatives have been key drivers in the increased betting.

Another factor in the increased betting has been Mr. Trump, who as a host of the TV show “The Apprentice” is well known in Britain, and whose often controversial statements have attracted foreign attention to the election, bookies said.

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Mr. Trump’s win is one of a recent run of bookies getting it wrong

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On Tuesday, odds offered by bookmakers were giving Mr. Trump a roughly 20% chance to win the presidency.

In 2015, bookmakers took a significant hit when the U.K.’s Conservative Party defied the odds to win a majority in that year’s general election.

Their biggest miss, though, was during Britain’s June vote to leave the European Union. At times, bookies’ odds gave the chance of Britain voting to leave the EU at less than 10%, leading them to shoulder big losses.

Back then, a few large wagers skewed the odds in favor of the pro-European camp, even though more people were actually betting on Brexit. A similar thing happened this time: As bookmakers gave Mrs. Clinton much better odds, a victory by Mr. Trump attracted more bettors.

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The election campaign led to some other notable mistakes

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Three weeks ago, Paddy Power paid out more than £800,000 early to some customers who backed Hillary Clinton, hoping to prevent higher losses as Mr. Trump’s numbers plummeted following the release of a recording in which he made lewd comments.

“We’re in the business of making predictions and decided to put our neck on the line by paying out early on Hillary Clinton, but boy did we get it wrong,” said Lewis Davey, a spokesman for Paddy Power. We have “very, very expensive egg on our faces.”

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Overall, the result was Paddy Power’s biggest-ever political payout, with the bookie now having to pay more than £4 million to customers who backed Trump

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William Hill PLC took around £4 million in bets on the outcome of the U.S. election, a record total for any political betting event. Bets on the U.S. election exceeded those on Scotland’s 2014 referendum on its membership in the U.K., which stood at £3.5 million, and June’s Brexit vote bets of around £2 million, said Graham Sharpe, media relations director for William Hill.

Ladbrokes Coral Group PLC estimates that the industry will pay out around £15 million.

However, Sporting Index Group, which holds about an 80% market share in the sports spread-betting business, reported Mr. Trump’s win will result in a six-figure profit for the company. “We took a position against Hillary and we won,” said Ed Fulton, political trading spokesman at Sporting Index.