Election Betting Shows Coalition Minority Government Most Likely in NSW

I’ve done a belated simulation of the NSW election from the betting odds. I only used Sportsbet because by the time I got around to entering the data, Beteasy and Ladbrokes had removed their displayed odds and suspended betting.

There are 93 seats in NSW, so 47 required to form a majority government. The Coalition currently has 52, Labor (ALP) 34 and 7 on the cross benches.

46 safe seats were identified: 20 Coalition and 26 Labor. Normally there would be several more safe Coalition seats, however they are being challenged by the Shooters, Fishers and Farmers Party (SFF) in Barwon, Murray and Orange, and by conservative independents in Dubbo, North Shore and Wollondilly.

I ran a simulation for the 47 contested seats, deriving the probability of winning in each seat from the Sportsbet odds. A detailed explanation is given in my post simulating the 2013 federal election.

In brief, I used 5 simulations of 100,000 runs each. In each run, a winner for each contested seat is decided by a random draw of each candidate, with the probabilities derived from the Sportsbet odds for that seat.

25 of the 47 contested seats have the Coalition paying less than 1.40. In 17 of those, the Coalition are paying 1.20 or less. Comparatively, 9 of the 47 contested seats have the ALP paying less than 1.40. In 5 of those, Labor are paying 1.20 or less.

Thus, most contested seats are leaning toward the Coalition, so we should expect the simulation to show more contested seats going to the Coalition than Labor. Unless the betting money has completely misunderstood the mood of the electorate, which it did in Brexit and the 2016 US election, betting is pointing to the Coalition having stronger prospects of forming a (probably minority) government than Labor.

The simulation results show the Coalition with a 39% chance of forming a majority government, Labor a 1% chance and a 60% chance of a hung parliament. There was very little variation over the 5 simulations.

In terms of seats, the most likely outcomes are 45 or 46 for the Coalition, 40 for Labor, 2 for the Greens (Balmain and Newtown), 2 for the Shooters (Barwon and Orange) and 3 or 4 for independents (Lake Macquarie, Sydney, Wagga, with an outside chance of the 4^th being Dubbo or North Shore). There is also a small possibility of an 8^th on the cross benches being a 3^rd Green: either in Lismore or Ballina, or a 3^rd Shooter in Murray.

What does this mean to form government?

The Coalition, with 45 or 46 seats only need to cut a deal with the Shooters and/or the independent in Wagga. These are all conservative electorates, so it shouldn’t be too difficult. Although most will remember the 2010 federal election, when the perfidious Tony Windsor and Rob Oakeshott betrayed their conservative electorates to install a minority Labor government.

Anything less than 44 seats for the Coalition will make a minority government difficult, since at least 4 of the cross bench MPs will be left leaning. The simulation gives a 31% chance of this happening.

Update:

The Coalition achieved a slender outright majority with 48 seats to Labor's 36 and 9 on the cross benches. Of those 9, 3 are Shooters and 1 is the conservative independent Joe McGirr in Wagga. Thus, even if they lose a couple of by elections, they will still be able to maintain government.