Betting odds for the UK making a Brexit are going crazy - but they may not be accurate

Betting on Brexit has reached World Cup proportions, with Ladbrokes recording an all-time high for bets on a Vote Leave and odds for a Brexit across all bookmakers on a knife-edge.

Graham Sharpe, William Hill's Director of Media Relations, said the betting market for the referendum was incredibly "volatile," adding it had "changed three times already this morning." Ladbrokes and other bookmakers have repeatedly slashed their Brexit odds in the last week.

But onlookers should remember that betting odds can be a poor indicator of which way a referendum will go on the day.

In a Brexit note released today, HSBC warns that despite voting polls and betting odds now moving in Leave's favour, "poll volatility ahead of a vote is not uncommon" (emphasis ours):

A week or so before the Scottish independence referendum in 2014 polls started to suggest a vote for independence. This rattled both politicians and markets but in the end there was a healthy margin to stay in the UK. With a week to go, the result is still highly uncertain.

Odds are directly informed by voting polls because punters use that information to bet on what they think will happen. But here's a look at polling a week before the Scottish Independence referendum, which shows a consistent trend upwards for the independent vote in red:

When it came to the results, "No" voters won comfortably. Going by this, HSBC says there is still time for things to go back in Remain's favour:

One week before the Scottish independence referendum in 2014 polls started to suggest a vote for independence. This rattled both politicians and markets. In the end there was a healthy margin to stay in the UK (55.3% vs 44.7%).

It added that a high turnout would also favour an In vote, saying it would "indicate more involvement from younger voters, who are thought more likely to vote to remain."

But it does admit the difference in Brexit's case could be the number of reputable polls which show Leave's dominance compared to Scotland's situation:

There were only a couple of reputable polls indicating a vote for Scottish independence in the weeks before the vote and before them the margin for staying in the UK had been healthy. By contrast, the EU referendum polls have consistently shown a very close race.

Either way, bookmakers have held firm with their Brexit odds, predicting that a Leave would be the favourite by the weekend.

Here's a quick look at the current Leave odds from the major bookmakers:

• Ladbrokes - 11/8
• William Hill - 11/8
• Coral - 11/8
• Sky Bet - 6/5
• Paddy Power - 5/4
• Betfair - 5/4
• Betfred - 5/4

Whichever way the vote goes, the level of interest from gamblers has been unprecedented.

Brexit betting has now become the biggest market for any UK political event ever, with the number of bets reaching football World Cup proportions. Over £30 million ($42 million) has been bet in the referendum market so far, compared to £35 million bet on the 2014 World Cup. 

Despite the overwhelming number of bets for Leave, Remain isn't going down without a fight, with one brave gambler placing a £35,000 ($49,500) bet on an In vote today. 

Vote in the Business Insider poll and see whether readers favour Remain or Leave: