What Are The Odds? Professional Gamblers Place Bets On Presidential Picks

January 14th 2016

I hate to advertise the work of someone who publicly supported repealing parts of the 1964 Civil Rights Act, but Fox News reporter John Stossel actually wrote an interesting piece about the election recently, and it's worth discussing.

In the article, Stossel asserts that political polling during elections is historically unreliable, and we should focus on political odds in betting arenas to see who's likely to win an election. Stossel wrote:

"When a polling company reaches the rare person willing to talk to a stranger on the phone, chances are that person is not well-informed about politics. “Who do I support for the nomination? Uh, who’s running? I’m embarrassed! Oh, yes, Donald Trump!”

As humorous as that statement is, it's patently true.

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So who's winning? Who's gonna be the next president?

According to polls, Donald Trump is leading the pack on the Republican side. He has 36 percent of the vote in the latest poll, and he's followed by Ted Cruz at around 19 percent and Marco Rubio at around 12 percent. On the Democratic side, Hillary Clinton is leading with 48 points over Bernie Sanders' 41 points.

It's important to note that in the last presidential election, eventual candidate Mitt Romney was leading in the polls at this point in the election. In 2008, when we had the last Democratic competition, Clinton was leading over Barack Obama in early January (but not by a lot).

How do the betting odds compare? Stossel and his team created a website called ElectionBettingOdds.com to show how the numbers are going. Below is the latest screenshot while this is being written.

Political bettingelectionbettingodds.com

As you can see, much to Stossel's dismay (and many others), Clinton is the likely winner in the 2016 presidential election. Her odds tower over her closest rival, according to odds, with Trump over 30 points behind her.

A candidate like Jeb Bush, who's only at around 6 percent in the latest poll, is suddenly in fourth place for the nomination. These odds come from Betfair.com, which is a highly respected betting service from the UK.

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"The odds come about from the wisdom of the crowds: essentially the odds come about in a way so there is equal amount of investor sentiment on each side," Koleman Strumpf, a University of Kansas economics professor who tracks betting trends, told ATTN:. As the people place bets and analyze scores of data and the algorithms kick in, the odds for the candidate become surprisingly accurate.

Strumpf said betting is very popular in the U.S. and Europe, where there are many people betting. He said hundreds of millions is wagered for each major election:

"One little known aspect is that these markets have existed for centuries. In particular in the U.K. and U.S. they go back to at least the early 19th Century, and in Italy there were markets on local elections and papal succession in the 16th Century."

Betting markets accurately predicted President Obama's reelection in 2012 and his initial election in 2008. "In short, these markets are surplussing accurate, and I would argue the most accurate source of election odds," Strumpf said. "Of course the markets are only as accurate as the information which participants have. Sometimes there is little information or it is skewed, in which case the forecast is not so accurate."

Hillary Clinton's eventual win may not be a sure thing, but the odds currently say it's pretty likely. We're still just under 10 months away from the actual election, so we'll have to watch how the odds change as that gets closer.

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