Before Malcolm Turnbull crash-tackled Tony Abbott out of the Prime Ministership, the betting markets on the 2016 Federal election were priced at around $1.65 for the Coalition and $2.20 for Labor.
This Coalition favouritism was despite the polls showing Labor with a large 54 to 46 two party preferred lead.
The Coalition’s seemingly short odds, at least relative to what the polls were showing, were linked to the possibility that Turnbull would become Prime Minister at some stage before polling day which, of course, is what happened.
Within hours of the popular Malcolm Turnbull becoming PM in September, the election betting odds dramatically shifted – the Coalition came into $1.20 hot favourites and Labor widened out to around $4.50.
By early October, the flow of money saw the Coalition come into Black Caviar type odds of $1.07 while Labor blew out to be a wide outsider at $7.50.
These seemed extraordinary odds in a two horse race where there are so many variables still to play out over the many months until polling day.
According to the bookies, the near certainty of a Turnbull Coalition election win saw even these short odds taken up by the punters. There was nothing but a trickle of cash for Labor.
That was until a week ago.
In the last week, there has been a slight shift back to Labor with the punters taking what still might be juicy odds of a Labor win.
Coinciding with the Brough/Ashby affair escalating and the quite remarkable blood-letting as Ian Macfarlane defected from the Liberal Party to join the Nationals, the Labor Party has come back in to $6.50 with the Coalition out to $1.11.
Allowing for the bookmakers margins, this points to the Coalition having a 85.4% chance of winning the election with Labor at 14.6%.
The Coalition are clearly still very strong favourites, but the near certainty of a Coalition victory has moderated somewhat.
A scandal, or internal party ructions can quickly erode electoral support for a leader and their party which probably explains the recent betting moves.
Politics, sport and life for that matter, are full of examples of outsiders winning seemingly against all odds.
Just last month, Prince of Penzance won the Melbourne Cup with odds of $101.00.
Serena Williams recently lost a tennis match when $1.01 favourite.
In politics, the Queensland State election in January 2015 saw the Labor Party cause a boilover, winning when $9.00 were offered against the Liberal National Party at $1.05.
The 2016 election is at least four months away and could be as much as 11 months away.
A lot can and will happen over this time and the betting odds will no doubt swing back and forth with each bit of breaking news, policy successes and failures.
Unlike opinion polls, which can have at least some respondents giving flippant, off-hand responses to how they may vote, betting markets need punters to risk some of their hard earned cash to influence the markets.
This certainly does not mean that punters and betting odds will always be correct, but if Mr Turnbull has any more weeks like the last one, punters may yet look at the $6.50 on offer for Labor as a bet worth taking.
Stephen Koukoulas is a Yahoo7 Finance expert with
more than 25 years experience as an economist in government, as Global Head of economic and market research, as Chief Economist for two major banks, and as economic advisor to the Prime Minister of Australia.