We like to check in on PredictIt from time to time, to see how the gamblers are viewing the presidential race. It should be noted that in 2016, bettors were consistent with the polls, and prices had to change dramatically at the last minute. Betting is not about the final outcome. It’s about where we stand now. So if you think the reality of the election is different from today’s betting, get in on it—it will change.
On the other hand, their argument is that their “prices” should be taken seriously, because people are betting real money on the outcome—“putting their money where their mouth is.” So let’s take a look. We should note that all of these prices, like the Dow Jones Index, are volatile, so by the time you read this (a few days later), they may be slightly different. And that’s an important point.
Another thing to understand is that the betting is based on a dollar. You bet a certain amount of cents, hoping to get a dollar for every “share” you buy. So anything that is priced over 50 cents means that the market thinks that will happen. Bet 50 cents and get a dollar back. Not bad.
In other cases, there are a number of options, so the price of each section of that market may be ten cents or less, and still be the leading bet. For instance how high will the winner’s margin be? That’s hard to predict, so each segment is a small portion of a dollar.
One thing that is odd about the PredictIt system, is that there are a number of ways to make the same bet. For instance, you can bet that Donald Trump will win, but you can also bet that “the Republican candidate” will win. Part of the reason for that is that there is a limit of how much you can bet in any, one “market.” By having several coinciding markets, you can bet a lot more.
Let’s go straight to the bottom line. Right now, PredictIt participants are betting 57 cents to 45 cents that Joe Biden will win. That does NOT mean he will win a landslide. It’s just a 3-to-2 bet that he’ll win by at least one vote. By a slightly larger margin, The “Democratic candidate” is priced at 61 cents to 44 cents for the “Republican candidate.”
Lately, there has been speculation that Trump might bow out of the race, fearing that he’ll lose, and he couldn’t bear to be a “loser.” Bettors don’t think that will happen. The market is 95 cents against 6 cents that Trump will be the Republican nominee. Ironically, bettors think there is a better chance that Biden will drop out, with more than twice as much money on that, 84 cents against and 17 cents for it.
Now let’s look at the margin of victory. In the popular vote, the big money is on Biden to win by, believe it or not, by a margin of 10.5%–or more! That’s 18 cents. By contrast, a popular vote win for the GOP tops out at 6 cents—and that’s for a margin of 1.5%—or less! That sounds far-fetched, until you realize that Hillary won the popular vote by 4.6% (not counting third party totals). Considering the anger in Blue States, a win of 10.5% is not unrealistic.
There’s a separate market about who will win the popular vote. Right now, a bet that Trump will win the popular vote is only 20 cents, while the vote against him is 80 cents. There’s even a market in what percentage of the vote will go to third-party candidates.
Right now, the bet is 55 cents that the percentage for all third party candidates will total between 0.5% and 3%. That’s exceedingly low.
Here’s an interesting one. People are betting 74 cents that a candidate will get over 50% of the vote. That’s not easy, since the electorate is so evenly split—and there are third-party candidates. Here are examples of less-than-50% winners:
One reason is that there’s only one “name” third-party candidate this year—Kanye West—and even his wife says he’s mentally ill. The betting is only one cent that Kanye will win the presidency. [But there’s 58 cents bet that he will get onto the Ohio ballot.] For a while, Justin Amash was considering running on the Libertarian ballot, and Jesse Ventura was planning to run as a Green. That would have shaken up the race, but both of them bowed out.
Currently, there’s a market for who will come up with the third-highest popular votes. Jo Jorgensen is tops at 81 cents, and Kanye West is third, at 7 cents. But either of them could catch fire, right? So you can bet 2 cents that either Trump or Biden will come in third! Hey, if you’re right, you’ll make 4,900% profit. Woo-hoo! You can also bet on fourth place. It’s 38 cents on Kanye, 38 cents on Jo—and only 1 cent for either Trump or Biden. If you get that right, you’ll get 99 cents for every penny you bet!
Of course, the popular vote doesn’t matter in the US of A. It’s the Electoral College where the votes count. Surprisingly, bettors don’t think we’ll see a replay of 2016. The market says the winner of the Electoral College will also win the popular vote, as well—by 71 cents to 29 cents. At the same time, the likelihood that Trump will win the popular vote is 20 cents—yes, 80 cents no. If you put those two together, you can see the market is against Trump right now—but that could change quickly and dramatically.
Bettors think there’s a chance that Dems could make a “clean sweep” of the presidency, senate, and house. It’s 54 cents for and 46 cents against. Looking just at the Senate, the top bet is that Dems will add four seats (18 cents), but it’s only 4 cents to bet the GOP will do the same. As for the House, it’ll cost you 85 cents to win 15 more cents that Dems will keep the House, and 30 cents to bet on Dems getting 246 seats or more.
In the vice-presidential sweepstakes, you can bet 91 cents that Mike Pence will stay on the ticket. If so, you’ll get an extra 9 cents back. Of course, the real question is whom Biden
will pick. Kamala Harris is far ahead in the betting, at 46, Susan Rice comes in at 33, Gretchen Whitmer is at 11, and all the rest are at 7 or below. This bet may be obsolete by the time you read this.
Here’s an interesting bet: If Trump wins any state he lost last time, you only have to pay 70 cents to get a dollar back.
And if you’re watching the returns, which State will be the “tipping point,” a candidate is declared a winner? Nineteen (18) cents says that will be Florida; 21 cents says it’ll be Pennsylvania. The State doesn’t have to be an upset. It just has to push the candidate over the top. It’s important to note that this market is about the final, official, Electoral College vote—not the projection by networks or newspapers.
And, finally, here’s how gamblers are picking individual States. The list gives State/district name with the betting odds, and then the Electoral value.
Nebraska 03—96, 1
Nebraska 01—95, 1
West Virginia—94, 5
North Dakota—94, 3
South Dakota—92, 3
South Carolina—86, 9
Maine 02—60, 1
[But, oddly, 60 cents that the winner of the TX Dem primary will be president]
Rhode Island—95, 4
Maine 01—95, 2
New York—94, 29
New Jersey—93, 14
New Mexico—89, 5
Nebraska 02—74, 1
New Hampshire—78, 4
Nebraska 02—73, 1
North Carolina—56, 15
In this rundown, Trump wins 27 States and districts; Biden wins 29. That’s close, but look at the Electoral College scores: Trump 204, Biden 334.
Once again, this is a snapshot. There are still three months to go, and the incumbent has a much better chance to pull off an “October surprise.” Also, remember that the betting on Clinton was way high in 2016, until the last day.
On the other hand, the polls were all over the place in 2016. People didn’t like Clinton, and although they also didn’t like Trump, he was an unknown quantity. This year, the polls have been consistent all year. Biden is much better liked than Hillary was, and people know Trump, now—and his approval rating has stayed in the 41-44 range. However, we need to remember that Trump won with only 31 percent of registered voters in 2016, so that 41 percent approval looks awfully good.
And, finally, the bettors just playing (although it’s with real money). These are not professional analysts, and if you read the comment section, you’ll question the mental capacity of many of them! Still, watching the markets is another way to gauge public sentiment, and at this moment, the polls and the betting both favor Biden. At this moment.