The 2024 election season is almost over. (Yeah!) Living in a swing state, the ads have been horrible to endure. I’m not a big fan of either of the presidential candidates, so it’s been tough for me. But I do enjoy watching the returns - so how will I watch?
I will pay attention to the betting markets. That’s about it. (See a nice video below - not from me.)
I won’t do much analysis on the initial returns that come in from the various states. Why? I don’t quite know what to look for and there are people who will know. And what will some of those folks do when the find out information leading them to think someone has an advantage? They’ll place wagers to make money.
That’s why prediction markets are so great. Whey they place wagers, the betting markets will move to tell me who is likely to win.
That’s right — Thousands of people across the world will be doing the hard work for me. There are people studying who will know when one county’s returns come in that would give them insights on whether Trump is outperforming 2020 in Pennsylvania, for example, or whether Harris is outperforming Arizona relative to Biden in 2020. Then they’ll take that information and place wagers if they think the election odds are off. That pushes the betting market odds to be much more accurate than any talking-head you’ll see on TV will be. (Except for those who are paying attention to the betting odds :)
Where can you find the betting odds? A couple great site are ElectionBettingOdds.com and PredictIt.org.
Three points to consider:
As of the time I’m writing this (October 21), the odds indicate that Trump is a slight favorite, but very slight. I’ve played a lot of poker, and he’s about 57 and she’s about 43% (note - the odds listed below total 104% - so I deducted two percent from each), which is the same odds someone gets if they get all in with two queens préflop vs. AK in Texas Hold ‘Em. In poker, that’s called a coin flip. For the presidential race, should we call this a “presidential flip?”
In 2016, the betting markets were telling us Trump won way before the pundits would admit it. They say the trends and the betting markets went wild for Trump.
A movement one way or the other doesn’t mean things are over early in the night! In 2020, the early returns had people betting that Trump was about to win reelection and he got to 80%. But as we know, he didn’t win. Were the prediction markets wrong? Well … I don’t know. 80% odds are not 100% odds and an 80% favorite loses one-fifth of the time. I’ll trust what the betting odds say more than polls or other information.
Enjoy the next two weeks - should be crazy!