The latest odds show that bookmakers are responding to the opinion polls by shortening the odds on a Yes outcome and lengthening the odds on a No vote. Their implied assessment of the probability of a No (Yes) outcome has therefore been plumetting (rising rapidly). The implications for the likelihood of a No vote are shown in Figure 1, which reflects data up to 11am on September 8th.
Figure 1: Implied Probability of a No vote based on odds offered by bookmakers on Yes and No outcomes.
It is interesting that the odds do not yet show that the probability of Yes and No outcomes to be evenly balanced, as is the case with the opinion polls. This would require the probability of a No vote to fall to 0.5, rather than its latest value of 0.67.
Are the opinion polls correctly anticipating the outcome of the referendum, or are the betting public discounting the patest poll results or expecting a late rebound for the No campaign? The current odds suggest that punters are still, on average, putting their money behind a No outcome rather than a Yes outcome.
Whatever else may happen, this referendum will provide an invaluable test of the predictive ability of opinion polls on the one hand and betting markets on the other.