The betting markets have lost all contacts with reality

[Dr. Jack]

I'm not sure why I regularly check the betting markets when it comes to politics since they are rarely correct. For example, after Biden lost New Hampshire this year, they predicted that Sanders would win every remaining primary. Obviously that wasn't even close to what happened. Also on the day Harris was picked as VP, they had Susan Rice at upwards of a 90% chance of being picked and Buttigieg was surging even though there was no evidence he was ever even considered to be a VP candidate by Biden.

But over the last few weeks, the betting markets are in rare form, even for their general batshit assessments about the world. Since the beginning of August, Bidens overall lead over Trump has gone from about 7.8 to 9.1. Biden is now very close to his all time high in his lead in the polls with voting starting in some states in just a few days. However during that time, Biden has gone from an average of about a 60% chance of winning the election, according to the betting markets, to a 50/50 toss up. There are days where every national poll coming out will show Biden up by 13 points (this happened a little over a week ago) but his odds of winning according to the bettors dropped 3 or 4 points in a single afternoon.

If anyone can tell me what in the absolute fuck these people are thinking, I am all ears. Because the only thing I can come up with is some kind of shared delusion on the part of people betting on the election

[Eliot Rosewater]

1. They

They know Russia is all over this fucking election in ways we havent even thought of yet that’s what they know

[TheBlackAdder]

19. Perhaps the Russians are the ones betting.

[soothsayer]

2. Ugh

[Dr. Jack]

3. One theory I have heard as that these sites advertise heavily on right wing media outlets

Maybe the Red Hats are spending their welfare checks on Trump shares because they have convinced themselves that the polls are fake and that Trump is heading for a landslide.

[Sogo]

4. I hope you're not taking these betting results as being indicative of anything.

Betting creates its own dynamic that is reflective of nothing else but that dynamic.

It's the same with Wall Street speculators who only play the movement in the market and are not interested in the value of the underlying stock/option.

Don't read ANYTHING into political betting markets, or it will likely disappoint you or drive you nuts.

[SharonClark]

5. They are betting on the election

to make money and win bragging rights.

Do betting markets usually predict election winners? Serious question.

[Snarkoleptic]

6. Best to ignore the national polls as POTUS is won precinct by precinct and state by state.

Knocking doors, phone banking, mailing postcards - I won't rest until inauguration day!

[apcalc]

7. Imo, they know Trump will cheat, like he did last time.

[unblock]

8. Betting markets can be more speculative

I don't really need a particular outcome in November, I just need the price of that bet to go up at some point before then because I can sell at any point.

Besides, it not too surprising that the conventions and the shootings and the payroll tax delay make the race, or more accurately the perception of the race, more even as there are more uncertainties that at least appear to give donnie a fighting chance.

Personally, I think it's a good time to "buy Biden", but then again I'm biased. But I can see why the predictive markets are tightening.

[Awsi Dooger]

18. I bought Obama at value many times in 2012

Same thing you are talking about. When the price dropped in 2012 I would grab more Obama. But he had the monumental situational advantage of incumbent whose party had been in power only one term. Now that advantage is to Trump. That's why I don't want any part of Biden shares, even if the price looks tempting right now.

Plus obviously the cheating variable. I have never been concerned about that until this cycle.

[Amishman]

9. RNC related bets closed this week

That Trumper money is now rolling into general election bets.

PredictIt has taken a Trumpy slide this week across the board. It took a Biden bounce right after the DNC.

[Klaralven]

10. PredictIt is at 56 cents for Biden and 47 cents for Trump

https://www.predictit.org/markets/detail/3698/Who-will-win-the-2020-US-presidential-election

538 Forecast has Biden winning 69 times out of a 100 simulations and Trump winning 31 times out of a 100.

https://projects.fivethirtyeight.com/2020-election-forecast/

RCP has a poll average of Biden supported by 49.6% of the voters and Trump supported by 42.6, a margin of 7.1%. Note that a 7.1% margin can be erased by moving only 3.6% of the voters from Biden to Trump. Furthermore, the RCP polls are out of date now, since they are based on data from 8/25 at the latest.

https://www.realclearpolitics.com/epolls/2020/president/us/general_election_trump_vs_biden-6247.html

[Yavin4]

11. Or, they may be trying to get people to take on losing propositions

Anyone taking on a 50/50 bet is dumb. If Trump does win, it will be a miraculous come back. If you bet Trump, you should be getting a much higher return since you're betting on the underdog.

[Dr. Jack]

13. You think more talented gamblers are taking advantage of delusional Republicans?

Like they are getting Trump supporters who don't know anything statistics or gambling and encouraging them to bet big on President Dickhead before they pull the rug out from under them?

[Yavin4]

14. Getting them take even odds on Trump? You bet.

It's like getting even odds on the Air Force Academy taking on Alabama Crimson Tide in college football. You take the Air Force academdy and you win, you're getting screwed.

[Claire Oh Nette]

12. sportsbooks

Sportsbooks set odd to encourage action on both sides of the wager.
Broncos -6 doesn't mean the Books think the Broncos will beat the Raiders by just six points; rather, the spread is to get money on both sides. Too much money wagered on the Broncos drives the spread...to even things out, now the Broncos give up 6 1/2, or 7 points.

Same in the betting markets for President. even money won't get an even balance of wagers.


Mr. Oh Nette often makes investments in short term, high risk leisure activities....

[ProfessorGAC]

21. Beat Me To It!

They're balancing the book.
They try to set up the book so they likely make a profit on either outcome.
The science is in the finance, not the predictive math.

[sarcasmo]

15. One high dollar bettor can influence the spread.

[andym]

16. Trump has gained 4% in the Yougov poll

probably explains the prediction markets recent moves--
Will be a few days to see how the polling plays out-- if the boost is real or durable.
Note that Trump is still losing!
https://www.yahoo.com/news/new-yahoo-news-you-gov-poll-bidens-lead-over-trump-shrinks-to-6-points-after-the-rnc-his-smallest-margin-in-months-164411657.html

[Awsi Dooger]

20. Yesterday was a nonsensical day around here

There were numerous polls posted that tried to pretend Biden had widened the lead. Meanwhile every indication was the other way. All logic was the other way. The second convention provides the net bounce. That's why both sides would always want to go second, if given the choice.

Bettors understood the advantage to the second convention and played accordingly.

As I've emphasized countless times, bettors are not solely reliant on polls. If all you know is polls then you don't know a damn thing, because all you know is the same thing everybody else knows. Those bettors "took a lead" on Trump while understanding the dynamics of the race would change somewhat.

Then if there are indications in the Biden direction they'll take a lead on that side. Keep gobbling up shares at value pricing.

[Awsi Dooger]

17. You are spewing a bunch of crap

Susan Rice never traded at 90 cents. The lowest Kamala Harris ever dropped in the final months was 35 cents. You can go to Predictit and see that chart. On the day before the announcement the favoritism shifted back and forth between Harris and Rice, and likewise that happened about a week earlier. But Harris was the favorite the vast majority of the time.

Those 13 and 14 point polls are an insult to intelligence. The bettors will understand that while partisan suckers gobble them up. As a political gambler since 1992 I wish partisans made the betting lines, and not the wisdom of the crowd. There would be bargains galore.

This is still like a future book. Incumbency holds enormous advantage. Partisans place far too much emphasis on polling. That is the greatest single difference between wise guy bettors and the square public. Partisans look at a favorable poll and not only take it at face value but assume it will continue in one direction only. The wise guy gamblers understand that the opposite is true, that there is a power ratings aspect to this, just like in sports. The result is very unlikely to be outside the power ratings parameter for each party. Those 13 and 14 point margins are so far outside the power ratings parameter it is impossible not to laugh at anyone who takes them seriously. Frankly it is not much different than right wingers believing in birtherism.

Also, keep in mind that many of these guys in political betting markets do not care about the result at all. They take advantage of overreaction in both directions. They'll have thousands of Biden shares at favorable price combined with thousands of shares of Trump at favorable price. Just keep making good bets regardless of your opinion or partisanship. Volume and an edge. It is like reversing the house edge in their favor. That was the same type of thing I did in Las Vegas for 24 years with middles and scalps. Every knucklehead simpleton has an impression that it is impossible to beat the casinos. Meanwhile those sportsbooks made an incredible amount of mistakes in the era I lived there. Dependable mistakes. You could count on them all year long and know where they would happen. Some books had the favorite too high, other would botch the money lines all the time, and so forth. It was not as much picking winners as shifting the math to your advantage.