After another bad week for one-time runaway Iowa Caucus favourite Ted Cruz, the betting flip-flop is complete. Donald Trump is now down to [1.6], rated a 63% chance to win the opening stage of the Republican primary process. In the Democrat race, Hillary Clinton is forecast to withstand the Bernie Sanders surge at odds of [1.4] (71%). But can we trust the market signals?
If this were a big election, to run a country, state or even a city, previous evidence would overwhelming say 'Yes'. In every big UK or US election since the advent of Betfair in 2001, the favourite to win the main market 100 days out - Next President or Winning Party, for example - has delivered. When it comes to contests determined by party activists, however, the record is nothing like so clear.
In fact, these early primaries have proved an absolute nightmare for favourite backers in the last two US election cycles, producing some of the most exciting in-running events in the history of political betting.
A fortnight before the caucus, relatively obscure Pennsylvania Senator Rick Santorum was effectively absent from the betting conversation. Available in excess of [200.0] for the nomination, Santorum was back in the pack at around [25.0] to win this state, despite staked his entire campaign around it.
On caucus night, he was still way behind odds-on favourite Mitt Romney before eventually emerging on top after a dramatic, topsy-turvy night of betting. The result wasn't confirmed until later than 6am UK time, after the pair had swapped favouritism every few minutes. Santorum ended up finishing second in the nomination race, trading down to around [5.0] and rewarding punters who'd backed high in search of a miracle.
This is one of the many great aspects of betting on US elections. Unlike the UK, where we have to wait for all votes to be counted before a result is announced, here they appear on a real-time scoreboard as each county or district declares. All of this is visible online or on TV channels like CNN and Betfair markets react accordingly, fast.
On other occasions, primary markets have been spectacularly wrong. Eight years ago, Barack Obama became an overnight global superstar by defying the odds to beat Hillary Clinton in Iowa. In response, he was matched at the minimum [1.01] for the next race in New Hampshire. Clinton bounced back, pulling off the biggest upset in political betting history and setting up a long, gruelling race for the nomination.
In this most unpredictable of cycles, there is plenty to suggest more turnarounds. After all, just four weeks ago, Cruz and Clinton were rated 80 and 85% chances respectively.
Trump may hold a consistent poll lead, but nobody knows whether his newly-inspired fan base will turn out, or even be registered to vote as Republicans. Likewise the Democrat race hinges on whether Sanders voters - drawn largely from independents and socialists - have become registered Democrats. The lessons are clear. Be very wary of so-called odds-on certainties, don't be deterred from taking a chance on outsiders, drink plenty of coffee and enjoy the in-running drama!
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