If bookmakers are to be believed, West Australians will be waking up on March 12 with a new Labor Government to lead them for the next four years.

Odds listed by every mainstream bookmaker has the Opposition as a strong favourite to defeat a Liberal-National Government seeking a third term.

But how much should people read into the odds?

It is far from uncommon to hear political observers point to the betting markets as a predictor of election outcomes, with a belief in some circles that the flow of money from wagers best indicates what will happen when people go to cast their votes.

While that belief certainly is not universal — and there are a couple of famous and recent failures — numerous studies indicate betting markets are more reliable predictors of electoral outcomes than polls or pundits prove to be.

Just under two months from election day, numerous bookmakers have already released their election markets — with one even allowing bets to be placed on individual seats.

One very clear trend from the betting agencies, as it stands, is that Labor is the favourite.

But how likely is the Liberal-National Government to be defeated, according to the market?

For best results, we took odds from five betting agencies on January 11, two months out from the election.

The most confident of a Labor win gave the Opposition odds of $1.22, while the least certain offered a return of $1.38 for each dollar wagered.

Then, we put those through a series of adjustments (explained at the bottom of this article), which leave us with the same probability implied by the raw odds but in an easier-to-digest percentage.

After that, we have the percentage chance of either a Liberal-National or Labor win.

Here are the results:

Government's chance of winning (%) Labor's chance of winning (%) Bookmaker 1 23.37 76.63 Bookmaker 2 27.65 72.35 Bookmaker 3 26.47 73.53 Bookmaker 4 29.36 70.64 Bookmaker 5 32.24 67.76

The Government has as little as a 23 per cent chance of winning a third term, according to one bookmaker market, but another suggests the probability is almost one-in-three.

Labor's chance of winning, according to the agencies, is somewhere between 67.76 and 76.63 per cent.

Odds point to Labor victory

Averaging out the odds from the five bookmakers, the markets imply Labor's chance of winning is 72.2 per cent, with the Government at 27.8 per cent.

Turning to the seat-by-seat markets, using the same process as before, it is possible to calculate the implied probabilities as a percentage form.

The market considers Labor likely to hold all 20 seats on its side of the pendulum — its lowest probability to hold one of its own electorates is 66 per cent.

But the Opposition needs to win 10 another seats which are either notionally Liberal, following a redistribution, or currently held by a Government MP.

These are the 10 the betting market considers most likely:

Electorate Government's chance of winning (%) Labor's chance of winning (%) Belmont 12.61 80.10 West Swan 10.56 78.51 Perth 12.80 75.06 Swan Hills 14.86 74.70 Morley 12.58 71.55 Forrestfield 14.64 71.45 Collie-Preston 13.66 66.24 Balcatta 28.03 63.53 Mt Lawley 27.96 60.97 Wanneroo 30.50 56.04

In electorates where the Liberals and Nationals are separate options in the market, their probabilities have been combined to represent the Government's chances of holding the seat.

Also, the totals in the above table do not add up to 100 per cent because of the presence of other parties, such as the Greens, in the markets.

The market also has Labor as more likely than the Government to win the seats of Burns Beach, Bicton and Bunbury.

The odds also suggest punters are expecting One Nation to have a significant impact in the WA election.

Using the same series of equations as before, One Nation is considered by the market to be a 37 per cent chance to win a Legislative Assembly seat and a 72 per cent chance of winning a place in the Upper House.

Obviously, all of these figures will continue to change throughout the campaign and favourable developments towards either side could sway things rapidly.

While the betting markets give political observers some idea of where things stand, 2016 offered plenty of examples of how difficult election results can be to predict.

Footnote: The odds adjustment process referred to in the article first converts the raw odd to a percentage probability. It then removes what is known as the "juice" or "vigorish" — adjustments made by the bookmaker to give it an edge on both sides of the bet. That can be done, without altering the probability implied by the raw odds, through a series of simple equations.