Labor wipeout in Tasmania?

It looks like Labor faces a tough fight  to retain its seats in Tasmania. Before the switch to Kevin Rudd, there was some speculation that Labor may even be completely wiped out in Tasmania. The switch back to Rudd seemed to ease those fears in the Labor camp. But with the Coalition appearing to have the momentum in the polls, what do the betting markets think about a Labor wipeout in Tasmania?

Tasmania's five federal electorates. Source: Wikipedia.

Tasmania’s five federal electorates. Source: Wikipedia.

Tasmania has five federal electorates: Bass, Braddon, Denison, Franklin and Lyons. Denison is held by the independent Andrew Wilkie. The other four are held by the ALP.

We ran lots of simulations for two extreme cases (as in this post), and found the implied probability of Labor winning zero seats in Tasmania is between 5% and 25%, according to the Sportsbet odds from August 14. What does this mean? As things stand, the betting markets believe Labor probably won’t get wiped out in Tasmania. Then again, this is an extreme scenario for a state which is currently wall-to-wall Labor (excluding Denison). Yet there is still at least a 1-in-20 chance it will happen.  To give you an idea of what this means, it’s about the same probability as getting four heads when you flip a coin four times. It’s unlikely, but not really a position you’d want to find yourself in.