Will Labor win the most seats in the next Victorian state election?

This market resolves on the next Victorian state election: whether the Labor Party (ALP) wins the most seats in the Legislative Assembly. The current price of 0.195 implies just a 19.5% chance, while our model puts it at 72%. Victoria is one of the most reliably Labor-leaning states in Australia: ALP won 55 of 88 seats in 2018 and retained power comfortably in 2022 despite a national swing. Labor has held the state government continuously since 2014.

The key drivers behind our estimate are ALP's structural advantage in Melbourne's urban and suburban electorates, where most of the electorate lives, plus a weak and fragmented opposition. The Liberal-National coalition has not recovered from its 2018 rout, and Greens and independents tend to take votes from the coalition rather than from Labor. Historically, ALP has lost Victorian elections only once in the last 20 years, in 2010, and even then narrowly.

The market likely underprices this outcome due to thin liquidity and spillover of federal anti-incumbent sentiment onto the state level. To win, Labor only needs to remain the largest bloc, not to secure an absolute majority. Polls consistently show ALP with a double-digit lead over the coalition.

Main risks: an early leadership change or resignation, a major corruption scandal, a cost-of-living shock that punishes incumbents, or a strong swing to independents in key suburban seats. If polling starts showing parity or a Labor deficit, the estimate would need to be revised down.