Scottish independence odds: bookmakers shorten odds on No

On the eve of the Scottish independence referendum, bookmakers have shifted their odds slightly to reflect the narrowing gap between the two campaigns as Yes and No appear almost neck and neck. But in spite of close polls, overwhelmingly the bookies are still backing a No vote. Why are they so confident?

As recently as April, polling suggested that the yes vote was averaging just 37 per cent; today it is closer to 50. But the odds being offered by most bookmakers for a no vote have remained relatively steady, in spite of the recent slight adjustments, at approximately 1/4 or 2/5, with yes hovering somewhere between 11/4 and 12/5.

Odds of 1/4 imply that the bookmakers believe that there is a 75 per cent chance that Scotland will remain a part of the union. And 11/5 for yes suggests that they think there is just a 27.5 per cent chance that Scotland will go independent.

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Graham Sharpe of William Hill told The Guardian last week that the steadiness of the odds is partly to do with liability management, because there has already been a lot of money placed on no: "We are facing a seven-figure loss on a no vote and a six-figure win on a yes vote so we're trying to even that out… Plus a lot of people think 15 per cent of 'no' voters haven't just disappeared overnight,” Sharpe said.

Mike Smithson of Political Betting said that he was surprised that the odds don't reflect the polls more closely: “It means there’s a lot of uncertainty around,” he told The Guardian. In his view, the odds may be explained by the possibility of a sizeable 'shy no' vote that hasn't shown up in polling. He also says that there may be a "strong base of elderly women" voting no: “They are the most likely to vote and the least likely to change their minds,” he said.

Experts at the bookmaker Ladbrokes say that as much as £50m could end up being wagered on the race by the time the polls open, The Independent reports. One of the largest bets they have received so far is from a punter who has put £200,000 on a win for the nos.

Research by a group of academics at Edinburgh University into the voting intentions of the under-18s has also challenged the conventional wisdom that younger voters are more likely to vote Yes. In their first survey, conducted in 2013, they found 72 per cent voting No against 28 per cent voting Yes. By the time of their second survey, in June 2014, the gap had closed, but the No camp still carried the day easily - 64 per cent to 36 per cent.

Similarly, some referendum watchers suspect the existence of a 'shy' No vote, says Don Brind: "Some [voters] could be telling family and friends - and pollsters – that they intend to vote Yes, but in the privacy of the polling booth have every intention of playing safe and voting No. This, by its very nature, is a factor the polls cannot pick up".

The Times quotes Martin Boon, a director of ICM, saying “he would not be shocked” if the polls turned out to be getting it wrong. "If the polls are wrong, my hunch is that they understate No".

According to the Daily Telegraph, the markets are in tune with bookmakers in believing the Scots will reject independence. Brenda Kelly, chief market strategist at the leading financial spread better IG, told the paper that a straw poll of nearly 200 of their clients found that 88 per cent think the no vote will prevail.