Trump still favourite despite bad polls
The presidential election betting continues to defy the polling trends. Donald Trump remains firm favourite at 2.111/10 ahead of 2.3411/8 for Joe Biden. Yet according to the RealClearPolitics average, Biden leads by 5.1%.
At the most extreme end, Quinnipac's latest survey puts the lead at 11%. Data experts such as CNN's Harry Enten estimate the true lead to be in the middle of that range.
As Enten indicates, these head-to-head match-ups are merely one indicator. Another is approval ratings - two of Trump's last five ratings were -13 and -14. Plus there is a plethora of polling regarding the wider party division within America, which brings us to the other big betting markets due for November.
Senate betting also set to heat up
Naturally, the presidential election will dominate media coverage and be by far the biggest political market of 2020. Probably all-time. However there will also be the full range of side markets - state betting, electoral college, vote share. Plus as always, control of the House of Representatives and Senate will also be decided on the same day.
The former is a nationwide race, involving the 435 congressional districts last contested at the 2018 mid-terms. In addition, 33 of the 100 Senate seats are up for election.
Right now, the market forecasts the same balance of power. Democrats are just 1.282/7 to retain control of the House. Republicans are 2.01/1 to retain the Senate. Closer to polling day, the individual races will all become lively betting heats.
As regarding the presidency, I am very bullish about Democrat chances and consider the market trends to overestimate the Republicans. Here's why.
Wider poll trends point to pro-Democrat swing
The trends we are seeing now are not merely driven by the recent effect of coronavirus but are long-term. They reflect what appears to be a marked shift away from the Republicans since Trump took office.
Most obviously we have the generic ballot - the best reflection we have of the overall House race. Whereas Republicans won that race by 1% in 2016, they now consistently trail the Democrats on this measure, by an average 8%.
That is entirely in keeping with the 'Blue Wave' that delivered a House majority in 2018 and best Democrat mid-term result since Watergate. However the narrative coming out of those elections was skewed by what simultaneously happened in the Senate - easily retained by the Republicans.
2020 Senate map much harder for GOP than 2018
The critical difference is that, (as will be the case in November) only a third of the Senate were up for election. The races contested in 2018 were largely favourable to the GOP, especially based on the realignment trends driven by Trumpism. This year's races, in contrast, could produce a bloodbath.
Republicans start in a strong place, leading the Senate by 53-47. That will likely become 54-46 by regaining Alabama - a famous mid-term upset for Doug Jones after the GOP picked a toxic candidate, Roy Moore, further skewed by mid term opposition enthusiasm.
That, however is about where the good news ends for Republicans. Three seats look extremely vulnerable - Arizona, Maine and Colorado - and at least a further handful are realistic Democrat targets.
Michigan and Arizona expected to flip to Biden
Most notably, consider two states Trump won in 2016 - Arizona (by 3.5%) and Michigan (0.3%).
In the former, Biden's average lead is 4% and the latest poll has it at 7%. The Senate numbers there are even worse. Mark Kelly leads Martha McSally by an average 9%, including by 12 and 13% in two of the last four.
In Michigan, Democrat incumbent Gary Peters is 6.8% ahead for the Senate. Biden's average lead is 5.5. Critically Governor Gretchen Whitmer - directly at odds with anti-lockdown protesters and who Trump called "that woman in Michigan" - has 64/33 approval on her handling on coronavirus.
Were Trump to lose those two, it would remove any room for error. He would then need to retain all the other states he won in 2016, including several in which he's behind. In Florida for example, he trails by an average 3.3% and in Wisconsin by 2.7%.
Trump well behind in must-win Pennsylvania
Nobody serious is laying out a path to Trump victory in the electoral college without those two states. Nor is it easy to spot a path without Pennsylvania, where he trails by 6.5%.
Further down Biden's target list, there are also worrying signs for Republicans. Their incumbent in North Carolina, Thom Tillis, trails by 1% for the Senate race. Losing Texas would signal a huge Democrat win and existential crisis for the GOP. It remains a long-shot upset but Trump's average lead is just 2.5% and Biden led in the penultimate survey.
There is of course a long way to go, especially in the Senate races, many of which don't even have confirmed candidates or extensive campaigning yet. It is extremely difficult, however, to justify Trump's favourite status, or feel confident about his party resisting another blue wave that this time could well carry the Senate too.
Follow Paul on Twitter and check out his website, Political Gambler.