WEBVTT - Picknation's Budin on Why Bettors Got Brexit So Wrong (Audio) 0:00:00.040 --> 0:00:05.880 Eleven three l global business news twenty four hours a 0:00:05.960 --> 0:00:09.080 day at Bloomberg dot com, the Radio plus Molobile lap 0:00:09.280 --> 0:00:12.560 and on your radio. This is a Bloomberg Business flag 0:00:12.760 --> 0:00:16.599 from Bloomberg World Handquaters. I'm Charlie Pellett. Stocks plunge the 0:00:16.640 --> 0:00:18.759 most in ten months. We are brought to you by 0:00:18.800 --> 0:00:23.240 the American Arbitration Association, the International Trade or Business Dispute 0:00:23.560 --> 0:00:27.520 Resolve Faster with the International Center for Dispute Resolution, the 0:00:27.720 --> 0:00:32.520 leader in Alternative Dispute resolution around the world. I see 0:00:32.640 --> 0:00:36.080 d R dot org. US stocks joined us sell off 0:00:36.120 --> 0:00:39.879 in global risk assets on speculation that the UK decision 0:00:39.920 --> 0:00:44.199 to leave the European Union will hamper worldwide growth. Equities 0:00:44.240 --> 0:00:47.120 sank to session lows in afternoon trading that now got 0:00:47.159 --> 0:00:50.040 down more than six hundred fifty points. It ends the 0:00:50.040 --> 0:00:53.840 Friday session at seventeen thousand, three hundred ninety nine, down 0:00:54.160 --> 0:00:57.400 six hundred eleven points, a decline today of three point 0:00:57.440 --> 0:01:01.040 four percent. SMP five hundred index down seventy six so 0:01:01.160 --> 0:01:04.400 dropped there of three point six percent, Stack down four 0:01:04.440 --> 0:01:07.720 point one percent. The tenure yield now at one point 0:01:07.800 --> 0:01:11.360 five six percent. Gold surged fifty seven dollars the ounce 0:01:12.440 --> 0:01:16.039 one again there of four point six percent. Sterling got 0:01:16.120 --> 0:01:18.880 to a thirty year low. I'm Charlie Pellett. That's a 0:01:18.880 --> 0:01:24.280 Bloomberg business flash. You're listening to taking Stock with Pim 0:01:24.360 --> 0:01:29.440 Fox and Kathleen Hayes on Bloomberg Radio. There are analysts, 0:01:29.440 --> 0:01:33.240 there are strategists, and then there are bookmakers. Steve Boudden 0:01:33.360 --> 0:01:36.600 is the chief executive of pick nation dot com. He's 0:01:36.640 --> 0:01:40.800 also the vice president of Gaming Nation and uh Well. 0:01:40.880 --> 0:01:43.920 Pick Nation is the world's largest online pay per view 0:01:44.000 --> 0:01:48.080 analysis site in the sports handicapping industry. Here to help 0:01:48.160 --> 0:01:51.520 us explain what went right and what went wrong in 0:01:51.600 --> 0:01:56.800 handicapping the vote for Brexit. Steve Boudin from Miami Beach. Steve, 0:01:56.840 --> 0:01:58.800 thanks for being with us. It's so good to be 0:01:58.920 --> 0:02:02.160 with you. So we've keep kind of characterizing it is 0:02:02.200 --> 0:02:04.880 what did the bookmakers get wrong? But it's not really 0:02:04.920 --> 0:02:08.360 the bookmakers correct. It's those people placing the bets. You 0:02:08.400 --> 0:02:10.880 know you got it right that you know, it's so funny. 0:02:10.919 --> 0:02:14.000 The biggest misconception in the bookmaking business is that every 0:02:14.040 --> 0:02:16.959 bookmaker has some Chinese guy in the back room with 0:02:17.080 --> 0:02:20.040 a syllabus and a calculator trying to figure out what 0:02:20.120 --> 0:02:22.360 the odds of the games are going to be. But 0:02:22.560 --> 0:02:25.160 just like any market in the world, the odds are 0:02:25.160 --> 0:02:28.840 not determined by the oddsmakers. The odds are determined by 0:02:28.840 --> 0:02:32.600 the betters. And for instanance football, the lines come out 0:02:32.680 --> 0:02:35.359 the night after the games, with the same night to 0:02:35.440 --> 0:02:37.800 the games end Sunday the games and Sunday night the 0:02:37.800 --> 0:02:40.400 new lines for the next week come out and those 0:02:40.440 --> 0:02:43.520 lines get bet all week long until Sunday, and you 0:02:43.520 --> 0:02:45.520 could start every game and pick them, but by the 0:02:45.560 --> 0:02:48.040 time it got the Sunday, that line is going to 0:02:48.120 --> 0:02:53.480 be the correct line according to the market. So, uh. 0:02:53.680 --> 0:02:58.800 The There's a lot of people talking though about how 0:02:58.919 --> 0:03:02.720 the bookies got it wrong when it comes to this 0:03:02.800 --> 0:03:08.200 political vote, which is not exactly like um, you know, 0:03:08.280 --> 0:03:11.239 not a like uh like a sporting event, although I 0:03:11.280 --> 0:03:14.440 guess it is. There's a story in the Independence saying 0:03:14.760 --> 0:03:17.000 the guy who is the head of political betting at 0:03:17.080 --> 0:03:22.400 lad lad Brokes, he just says people were over confident 0:03:22.560 --> 0:03:25.840 on Ron remaining. But does this just kind of show 0:03:25.919 --> 0:03:31.040 the the folly of relying on something like the odds 0:03:31.080 --> 0:03:34.360 the bookies are caring to determine whatever outcome is going 0:03:34.440 --> 0:03:37.560 to happen when it comes to America, and in the past, 0:03:37.960 --> 0:03:40.880 the bookies have never been wrong in predicting a president. Only, 0:03:40.920 --> 0:03:43.920 like I said, saying that like you're the host initially 0:03:43.960 --> 0:03:47.440 said and alluded to saying that the bookies predict anything 0:03:47.600 --> 0:03:50.920 is just in and of itself disingenuous because it doesn't happen. 0:03:51.280 --> 0:03:53.800 The it's the who didn't, who got it so wrong, 0:03:54.200 --> 0:03:57.080 or the betters, And I believe the unique scenario here 0:03:57.400 --> 0:04:01.160 was there was a genuine disconnect between the people um 0:04:01.200 --> 0:04:05.800 in Britain that actually have access to bookmakers and disposable 0:04:05.880 --> 0:04:08.480 income to bet with bookmakers and time in their day 0:04:08.680 --> 0:04:10.800 to talk to their friends about what they think they're 0:04:10.800 --> 0:04:13.400 gonna bet on and then actually go down take time 0:04:13.440 --> 0:04:15.600 out of their day to go down to the place 0:04:15.800 --> 0:04:19.360 to make the bet. Well, those people all probably we're 0:04:19.480 --> 0:04:23.839 going to vote remain because remaining probably helped those people 0:04:23.880 --> 0:04:26.159 in life or didn't hurt those people as much. But 0:04:26.279 --> 0:04:29.400 the rest of the country, who's hurting and who needs 0:04:29.520 --> 0:04:32.320 change and who doesn't like the direction of the country 0:04:32.360 --> 0:04:34.920 and it doesn't have the disposable income and the means 0:04:34.920 --> 0:04:37.520 and the wherewithal in the mindset to go down and 0:04:37.560 --> 0:04:39.839 actually place a bet with a bookmaker and take that 0:04:39.920 --> 0:04:42.320 kind of time out of their day for a luxury 0:04:42.320 --> 0:04:45.039 activity like that. Well, they're all the people that were 0:04:45.040 --> 0:04:48.800 betting out and exit, and they weren't being represented in 0:04:48.839 --> 0:04:51.520 the bookmaking vote like they normally are during the soccer 0:04:51.600 --> 0:04:54.000 games because they didn't have time to make a bet 0:04:54.000 --> 0:04:57.039 on political outcomes. This outcome was much more than just 0:04:57.120 --> 0:04:59.120 a bet for them, you know, in their minds, it's 0:04:59.160 --> 0:05:01.880 their whole life and livelihood. And I don't think for 0:05:01.880 --> 0:05:04.080 the first time, I don't think that that vote was 0:05:04.120 --> 0:05:07.200 represented in the betting because those people just don't have 0:05:07.320 --> 0:05:09.800 the time to bet. Steve, you bring up an interesting 0:05:09.920 --> 0:05:13.040 point because whether it is a sports book or in 0:05:13.040 --> 0:05:17.000 this case, betting on a political outcome, it is the 0:05:17.040 --> 0:05:21.000 constituency of who is actually part of the event. For example, 0:05:21.000 --> 0:05:23.520 if you're talking about a team, you can analyze a 0:05:23.520 --> 0:05:26.200 team from the outside, but if you are in fact 0:05:26.279 --> 0:05:29.039 part of the electorate, and as you just described, don't 0:05:29.200 --> 0:05:33.919 participate in the bookmaking process, it's not as if anything 0:05:34.000 --> 0:05:36.159 is wrong. It just means that you don't have a 0:05:36.240 --> 0:05:40.760 really decent and coherent sample. Is that accurate? That's exactly correct. 0:05:40.800 --> 0:05:45.240 That is exactly correct. In this case, the people that 0:05:45.279 --> 0:05:50.320 were betting, we were disproportionately represented. So can you apply 0:05:50.400 --> 0:05:52.719 that to other things? So, for example, if you're betting 0:05:52.760 --> 0:05:55.200 on other types of events, or indeed on the other 0:05:55.240 --> 0:05:57.800 types of sports events, you don't want to really know 0:05:57.960 --> 0:05:59.760 about the event. You want to know about the other 0:06:00.160 --> 0:06:02.600 who are betting and participate. That's exactly correct. And that's 0:06:02.640 --> 0:06:05.240 the difference between what we call in our business knowing 0:06:05.400 --> 0:06:08.680 sharp money versus sucker money. And by the way, sucker 0:06:08.760 --> 0:06:12.080 is a derogatory term. That doesn't really mean something so derogatory. 0:06:12.080 --> 0:06:15.680 It just means that somebody is behind the bookmaker on 0:06:15.720 --> 0:06:18.719 the information chain. If the game moves from four to 0:06:18.760 --> 0:06:21.840 four and a half, the bookmaker knows it before the customer. 0:06:21.839 --> 0:06:24.520 If the customer knows it before the bookmaker, he's a 0:06:24.560 --> 0:06:27.640 wise guy. He's not a he's a he's a sharpie. 0:06:27.640 --> 0:06:29.919 He's not a sucker. If he knows it after the bookmaker, 0:06:29.960 --> 0:06:33.320 he's a sucker, meaning that he's a retail customer versus 0:06:33.320 --> 0:06:36.000 a wholet sale customer. You know, if here, but if 0:06:36.160 --> 0:06:37.920 very would have been great for people to hear this 0:06:37.960 --> 0:06:40.200 conversation before the vote, because it seems to me the 0:06:40.240 --> 0:06:42.640 logical conclusion is if you'd realize that there's a very 0:06:42.680 --> 0:06:46.000 limited pool of people who might be voting to leave, 0:06:46.080 --> 0:06:48.760 who are betting, you could have made money saying Aha, 0:06:49.400 --> 0:06:52.279 that's not a great gauge. I'm going to take those 0:06:52.320 --> 0:06:54.480 odds right and vote to leave. I could have made 0:06:54.480 --> 0:06:56.360 a lot of money. Well, let me tell you something. 0:06:56.400 --> 0:06:59.960 As an analyst who makes his money analyzing games before 0:07:00.040 --> 0:07:02.479 the game start, I can tell you it is so 0:07:02.560 --> 0:07:05.359 much easier to analyze something after it's happened than before 0:07:05.360 --> 0:07:08.320 it starts. So in this case we get the luxury 0:07:08.360 --> 0:07:11.240 of seeing the cause and effect and then going and saying, Wow, 0:07:11.320 --> 0:07:13.520 why did this happen? And that's always a lot easier 0:07:13.520 --> 0:07:15.559 to figure out than trying to figure it out before 0:07:15.600 --> 0:07:18.000 it happened. Um, and I think in this case, you know, 0:07:18.080 --> 0:07:21.559 it's shocked everybody that you know that it was so wrong, 0:07:21.600 --> 0:07:23.920 and searching for that answer, we figured out that hey, 0:07:23.920 --> 0:07:26.920 wait a second, these people that are voting exit, they're 0:07:26.920 --> 0:07:30.400 not being represented in this book making call. Steve Booton, 0:07:30.400 --> 0:07:32.320 thank you so very much. We'll look forward to talking 0:07:32.320 --> 0:07:35.000 to you again as the presidential racing United States heats up. 0:07:35.040 --> 0:07:38.400 The CEO picnation dot Com joining us from Miami Beach. 0:07:38.720 --> 0:07:47.160 This is taking Stock on Bloomberg Radio. Coming up on 0:07:47.320 --> 0:07:50.560 taking Stock, we're going to take stock of oil and 0:07:50.880 --> 0:07:54.560 energy with fuddel Gate, Managing director, oil and gas analysts 0:07:54.600 --> 0:07:58.280 for Oppenheimer and Company. 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