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And they’re off! As Gordon Brown confirms what most pundits had been expecting for some months – that the General Election will take place on May 6 - Reg readers can now turn this otherwise tedious event into an opportunity for making money.

We are of course talking about betting on the outcome- or rather, the outcomes – we are likely to wake up to on the morning of 7 May. Almost every eventuality is now up for grabs, from the colour of the next government, to the number of seats held by each party, to the likelihood of any individual MP surviving this election and going on to draw expenses for another four years.

The more unlikely the outcome, the better the odds - and therefore the bigger the payout should you win. If you’d like to maximise your winnings, a good bet – but one very unlikely to pay out – is that the Lib Dems will emerge from the election as the biggest party. That bet, as of today, is paying out at approximately 200-1 at most bookies. It is also, barring electoral cataclysm, likely to be one of the easiest ways to lose a tenner this month.

On the other hand, a bet on the Conservatives emerging with the most seats will pay out at a measly 1-8 (£1.25 return for every £10 bet).

The problem with betting as a means of improving your finances is that it requires either a great deal of expert knowledge of the subject or a great deal of luck. We are ignoring the possibility that you may be possessed of psychic abilities, on the grounds that any reader so endowed has probably long since ceased to work in IT and is now sunning themselves in the Bahamas.

However, there are certain things you can do to improve your chances of making a return, including one sure-fire way of "winning" – for those who have the patience and spreadsheet skills to follow the betting markets very closely indeed.

Invaluable for any would-be electoral gambler is politicalbetting – a world-renowned site, whose author has made a small fortune out of his judicious estimation of electoral outcomes. Take a look as well at UK Polling Report and Electoral Calculus. These sites both feature electoral calculators that turn forecast share of vote for each party into likely seat outcomes.

But beware: as we explained back in May 2009, there are systemic factors at work in all polling organisations leading to skewed results in every poll. The point of using electoral calculators is not so much to "predict" the precise outcome, as to get a handle on which results are likely and which are almost certainly fanciful. For instance, for Labour to drop below 200 seats would require its vote share to fall to about 24 per cent, with the Tories maintaining a 15-16 per cent lead.

Is that possible? Yes. Likely? Not very.

(For the Lib Dems to obtain as many seats as Labour would require the former to take around 10-12 per cent more of the popular vote than the latter.)

You will do slightly better on the "big bets" – number of seats, composition of government – by taking your money to an online organisation such as Betfair. Today, for instance, Betfair is quoting 13-1 on Labour having a majority of seats post-election, while Ladbrokes is quoting a measly 10-1. The difference is that under the Betfair model, betting books are created by the punters themselves, with the organisation raking in a small commission off winnings, while more traditional bookies set up the books and bet against you.

That means Betfair tends to give better odds, but is less likely to support the placing of larger, more esoteric bets, such as the outcome in individual constituencies.

Of course, if you follow the betting on the election closely, there are ways to ensure that you will make money. The method is known as arbitrage, exploiting the differences in odds that turn up at different times and different bookies and enabling a punter to lay bets in such a way that no matter what the outcome, they will take a profit.

If you’d like to take a somewhat bigger risk, the world of spread betting beckons. This involves "buying" points relative to a range and being paid according to how accurate your estimate is. Thus, if the market estimates that the Tories are likely to obtain between 300 and 320 seats, and you believe they will do better, then you can bet at £10 per seat on every seat they obtain over 320.

The catch? If they gain 330 seats, you will have won £100 – but if they only obtain 310 seats, you lose £100.

Of course, you don’t have to be quite so serious. The various betting books provide insight, as well as a source of potential income. At 8-11 on, the Greens are currently expected to win a seat before the BNP or UKIP. At 16-1, Vince Cable is a good outside bet for next Chancellor.

Meanwhile, those looking to profit from electoral upset could do worse than a flutter on the outcome in Morley and Outwood, where Ed Balls’ Tory challenger is currently on odds of 7-4 , or Exeter where at 11-10 on, the Tories are currently favourite to oust another Cabinet Minister – Ben Bradshaw. ®

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