Most politicians say they do not follow the polls, particularly when they are lagging behind! The reality is that they examine them in minute detail. But long before the recent 2015 general election when Prime Minister David Cameron stated that he followed the betting markets more than the polls we can now see why.

The public opinion polls got it so very wrong. The academics conducting the exit polls could not believe their eyes on election night because they had been blindsided by the opinion polls that were far from accurate.
It seems to me that if you are stopped in the street by a pollster, or telephoned, you are unlikely to answer the questions put to you. Respondent have no wish to offend the political beliefs of the interviewer and very often people will tell interviewer what they think they want to hear. Internet based polling should solve that problem except it most probably makes the situation worse. 

There has been a lot of coverage that emails and online correspondence can be extracted and used against someone if the need should arise. In some countries you most definitely would not want someone in authority to know your political beliefs. In the UK we are safe today, but what of the future?
So the exit poll conducted by secret ballot is the safest measure and it reinforces the age old system of election by secret ballot as the best way to run a democracy.
There is another way of predicting the outcome of elections other than the fallible opinion polls – following the money placed by gamblers with bookmakers in the election betting market. 
In a recent presentation at the Society for the Study of Gambling (May 2015) Professor Leighton Vaughan Williams from Nottingham Trent University gave an interesting presentation on the history of election betting and the accuracy of following the betting markets.
Professor Vaughan Williams said that the betting markets incorporate all known and available data into the simplest form – the betting odds. 
The earliest betting on elections dates back to 1868 on the Curb Exchange in New York. Up to US$1 million ($200 million at 2012 prices) was bet on the outcome of the Presidential Election. Between 1869 and 1940 this market failed to predict the winner only once.
In 1985 Ladbrokes made a market in the Brecon and Radnor by-election. 
The famous Mori poll had Labour to win by 18%. Ladbrokes had the Liberals at 4/7 and Labour at 5/4. The Liberals won.
During the US Presidential Election campaign of 2004 the polls were mixed: some had Kerry with a two point lead, others gave Bush a four point lead. In the betting market for individual states, the selection which was favourite won in all 50 states. In the US Senate election of 2006 the betting exchanges were one hundred percent correct on all seats.
In the 2008 US Presidential Election the polls showed different candidates winning at different times. On polling day, President Obama was 1/20 with the betting exchanges. It was a landslide for Obama. 
The polls were again found wanting in the Scottish Referendum 2014 where the vote was a clear yes or no. In the week running up to polling day Panelbase had NO to independence with a 1% lead and YES to independence could be found with a lead at YouGov of 2% and 7% at ICM. The actual result was NO at 10.6%.
But NO was reflected in the betting markets all along. At William Hill a client had staked £900,000 to win £193,000 at an average price of 1/5.
The opinion polls do matter because politicians in London, on seeing the polls in favour of independence, rushed up to Scotland and made rash promises on devolution that will cost the rest of the country. 
The killing conclusion to Professor Vaughan Williams’ presentation is that those who ignore the betting markets will pay for it, as was the case in 2004 and the Bush vs Gore US Presidential Election.
Most of the polls had Florida too close to call. In contrast the betting markets had Bush winning by a big margin. Had the Democrats took note of the betting markets they would have sent their troops to Ohio, where the betting markets showed the race on a knife edge, and not to a lost cause in Florida. Had Gore won Ohio he would have been President. The history of the world would have been very different.
So which betting market is the best at predicting an outcome? I would suggest the UK because of its low transaction cost at 15% Gross Profits Tax so there is less distortion and bias.
The US is in my view easier to predict because it is nearly always a two person race. Yes/No referendums have the same characteristics. The UK has numerous political parties but, even so, the money poured in on the Conservative Party in the last week of the election and the Conservatives carried the day. 
Professor Leighton Vaughan Williams concluded: 
Recent years have witnessed ground-breaking shifts in the way in which betting is taxed, regulated and perceived by economic theorists. 
• This means that betting markets will become more than just a major part of our future. Properly utilized they will be able to tell us what that future is likely to be! 
• We seem therefore to have created, almost by accident, a ‘high-tech’ crystal ball that taps into the accumulated expertise of mankind and makes it available to all. 
• In this brave new world of prediction markets, it seems only sensible to make the most of it. Both to forecast an election, and to win one! 

GBGC is grateful to Professor Leighton Vaughan Williams for providing the text of his presentation.