Bookies not backing Greek 2015 euro exit yet

By Patrick Graham

LONDON, June 17 (Reuters) - Growing nerves over Greece have been the talk of financial markets for the past week, but online betting firms see only around a one-in-five chance it will leave the euro zone this year -- a lower likelihood than earlier this year.

British-based bookmakers Ladbrokes (LSE: LAD.L - news) and William Hill (Other OTC: WIMHY - news) ceased taking bets on Greece becoming the first country to leave the euro weeks ago, but on prediction markets sites, which allow punters to bet against each other, the debate is in full swing.

Such sites, which aggregate the best guesses of punters putting money on the line, have proved the best indicator of the outcome of a string of major political events including last month's UK parliamentary election.

They show probabilities broadly ranging within 1-2 points of 20 percent when the question is whether Greece will leave the euro this year. At one of the biggest sites, Betfair, bets worth more than 120,000 pounds ($189,000) have been laid on the issue.

Those contrast with the odds Betfair itself -- or competitor Paddy Power (LSE: PAP.L - news) -- will give punters on their sportsbook websites, which suggest a lot more anxiety about the geopolitical risks they are exposing themselves to.

Paddy Power is offering odds of 2-to-1 on Greece leaving the euro, but that is still down from 11/10, or almost even money, at one point earlier in the year.

"This reflects a change in the percentage chance of Greece exiting the euro zone from 48 percent to 33 percent," a Paddy Power spokesman said. "But with the situation constantly evolving we wouldn't rule out further fluctuation over the next few days. We can't see Greece lightening up anytime soon."

The sums involved are insignificant compared to the trillions in play on global financial markets daily.

But memories are still fresh of March's Israeli election and last year's Scottish independence referendum, when the betting sites also proved right and modelled opinion polls were way off.

For investment managers schooled in the art of measurable data rather than political or behavioural analysis, that record of accuracy -- which is supported by a handful of studies -- is gold dust.

Some surveys of market traders on Greece point in similar directions to the betting numbers.

Reuters latest polling of money market traders a week ago showed one in three backing Greece to leave the euro this year.

Yet another survey this week of bank economists gave similar odds to Greece leaving the euro at some point, and here the betting houses take a more aggressive view.

Paddy Power gives almost even odds -- 11/10 or a 48 percent probability -- of Greece having an official currency other than the euro by the end of 2017. It sees a 45 percent chance -- or odds of 6/5 -- that Athens will default on its debt this year, an event that would not necessarily force a "Grexit".

Another UK-based firm, William Hill, stopped taking bets on a euro exit last month. At the time the odds were 1/5 that Greece would be the first country to leave the euro zone and 3/1 that it would quit this year.

"There are a lot of people who know a lot more about the likely outcome than we do and with the negotiations at such a sensitive phase we did not want to increase our liability," said William Hill spokesman Graeme Sharpe.

"We stand to lose a five-figure sum (if Greece exits) and we have no intention of making it a six-figure sum." (Additional reporting by Jamie McGeever and Marc Jones; Editing by Catherine Evans)