Gambling lines on the economy can be the ultimate oxymoron. If you predict that the national GDP is about to plunge, you’re actually making money from the woes of businesses and workers.
It fits within the “consolation prize” strategy of betting against good news. Someone might wager that her favorite football club will lose an FA Cup match, for instance, knowing that the payoff involves pure joy or at least a few pounds.
Those who gamble on the fates of central banks and economies may be playing an even deeper game.
Betway is offering its clients betting odds on the rise or collapse of Great Britain’s financial sector over the remainder of 2019. Posed as a proposition wager, “Will the UK Economy Enter a Recession in 2019” the sportsbook’s prop is much more generous if a recession does occur.
The gambling market for the UK to grow throughout the fiscal year is currently set with a paltry payoff of 1/4. Meanwhile, those who wager on “yes” may be rewarded at 11/4 if hard times strike the United Kingdom.
Might a number of high-rollers choose to invest heavily in the “yes” market, so that if an economic downturn hits, at least they’ve got a big payoff from London? It’s a practical point of view. However, it could prove difficult getting the sportsbook to agree on what exactly a recession entails…and when the market is decided.
Wikipedia’s definition of an economic recession is expansive, with many trademark statistics and surefire signs of a sour economy listed alongside a single-statistic litmus test for what may constitute an “official” recession. The event is considered to occur whenever a nation’s GDP goes down in 2 consecutive quarters.
GDP numbers are often revised months after the fact, meaning that Betway could also wait until as late as spring 2020 to pay off the market.
Ongoing Brexit negotiations will play a crucial role in shaping the next year of UK commerce, in addition to a potential worldwide economic slump and the rise of protectionism across Europe.
Image from Pixabay.