It’s not quite true. Media reports focused on betting agencies outside of the US where betting pools are smaller compared to those in the United States. In the US, betting pools on the presidency are huge, carrying hundreds of millions of dollars despite online gambling being banned in 21 states.
In terms of probabilities based on US betting markets, Donald Trump has a 48.5 per cent chance of winning in November, with Harris just ahead at 49.15 per cent. But in terms of aggregated odds across the US agencies, Trump is at $1.98 and Harris at $2.02 at the time of writing.
Harris may take the lead with an expected bounce from the Democratic National Convention in Chicago beginning on August 19. What might have been a graveyard atmosphere had Joe Biden dug his toes in, or a brutal open convention with a half a dozen candidates pressing their claims, now looks like a Harris-Walz love-in.
Psephologists and earnest commentators will say betting markets in elections merely reflect public opinion and polling. But only twice in the last 80 years of US presidential elections have favourites lost – the first in1948 when incumbent Harry Truman beat 1/8 favourite, the Republican candidate, Thomas Dewey. The second came in 2016 when Trump won as a 7/2 underdog.
Ignoring the psephs, my view is betting markets are at least as good an indicator of the result as polling and possibly better. There may be some dumb wagers in the pool but overall bets are more likely to reflect the probabilities than a cocktail of polling in an election where voting is voluntary. Examined in the here and now, the odds suggest Trump is just in front of Harris and that is probably about where we are, considering the difficulties the Democrats will have in retaining Pennsylvania and Georgia.
Watching Biden’s disastrous performance in the presidential debate back on June 27, I steered clear of social media takes and even conversations with colleagues. As with almost every pundit across the world, in my self-enforced cone of silence, I came to the realisation that Biden had no hope of beating Trump and from there it was only a matter of time before the tap on the shoulder came.
The only external measure I paid attention to was the betting markets. Within 10 minutes of the debate getting underway, and that horrific moment when Biden lost his train of thought and lapsed into mumbles, his price blew out while Trump’s firmed.
By the end of the debate, Trump had come in from a tepid $1.95 favourite to $1.70 with Biden blowing out to $4.50. As the days passed, Trump would shorten further to $1.30. Biden moved beyond a 5/1 shot while other potential Democratic candidates, including Kamala Harris, shortened.
While there was strong support for Trump, the response of the markets was that Biden had little or no hope. As the Democrat hierarchy, including Barack Obama and Nancy Pelosi looked to unglue Biden from his seat, the bookies turned to other prospective candidates. The markets reflected that Harris was more likely to win than Biden two weeks before she announced her candidacy. When she did decide to run, the markets indicated she had a 28 per cent chance of victory. A dollar wagered in June on Harris becoming the next POTUS would get you $34 back should she win in November. Now it’s little better than even money.
We might recall an electoral dog’s breakfast in the early stages of the Democratic primaries in 2020. You could have thrown a blanket over the field, more Cox Plate in size than Melbourne Cup but with no stand out. Pete Buttigieg won the Iowa caucus. Bernie Saunders romped home in New Hampshire and Nevada. Almost every serious candidate out-polled Biden. By mid-February 2020, Biden was so far down the line of betting, he appeared alongside celebrity candidates who weren’t running and were listed only for humour value, like George Clooney.
Then came the South Carolina primary on leap day in February. The black vote made up almost half of all votes cast. Biden won 48 per cent of the vote with only Saunders and Californian hedge fund manager Tom Steyer reaching double figures. Biden’s campaign was finally off and running. The rest is history. But if you managed to have a lash at Biden to win the presidency before the 2020 South Carolina primary, a dollar wagered would have got you $175 back.
It’s all terribly easy in hindsight but at the time, I was convinced that Biden would win South Carolina and he was the only Democrat capable of beating Trump. And so it proved. After the debate in June, my long odds lash of choice, California governor Gavin Newsom decided to sit this one out. Hey, it’s called gambling for a reason.
Alas, we are almost too far into the electoral cycle to expect any astronomical payouts in the ordinary run of play. The Democrats’ vice-presidential presumptive nominee Tim Walz is 150/1 to become the 47th POTUS in November while his Republican counterpart, JD Vance is 200/1.
Trump’s former chief of communications for precisely 11 days, the always entertaining Anthony “The Mooch” Scaramucci, has suggested Trump may drop out of the race. I don’t buy it for a second but if you’re looking at a small wager at long odds, maybe JD Vance is worth a small investment on the basis that there are 88 days to go before a vote is counted and almost anything can happen in that time.
While polling remains a significant indicator, by late October betting markets will have formed a strong sense of the prospective winner. History tells us that whoever is the favourite at that time is around 20 times more likely to win than the outsider.
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