Betfair's market has completely flipped as bettors rapidly lose faith in Donald Trump's re-election bid. Paul Krishnamurty does not expect a turnaround...
"As an incumbent, there is even less historic precedent for such a turnaround. No incumbent president has won from being further behind than 2.7%"
What may ultimately prove to be the biggest political gamble of all-time may be underway. Joe Biden just hit his lowest odds yet to be Next President, at odds of 1.664/6.
Record amounts traded on US election
Just shy of £40M has been matched in that principal US election market, equating to more than twice the levels at this stage of the 2016 election. That historic Trump/Clinton encounter was the biggest market in Betfair's history, so numerous records are on course to be broken. Over the past month, an average of 500K has been matched per day.
The move for Biden marks a distinct turning point. A wide differential between pollsters and election models versus betting markets has been evident for months, and still exists. Biden's odds reflect a 60% chance of winning. The Economist/Yougov rate it at 87%.
My long-term analysis that Trump's odds were too short has always been legitimately countered by arguing that the incumbent had the time and opportunity to turn around dire polls. With a good campaign, for example.
Polls get ever worse for Trump
Trajectory, however, is moving fast in the wrong direction. Trump's polls have gone from poor to catastrophic. The latest NYT Upshot/Siena poll - A+ rated by Fivethirtyeight - record Biden leading by 14%. His average lead is now above 10%.
A second common argument for backing Trump involves the electoral college. As in 2016, he could afford to lose the popular vote and stay in power - by winning the swing states. The localised numbers from the same pollster are arguably even grimmer for the president.
New NYT/Siena polls:? Greg Sargent (@ThePlumLineGS) June 25, 2020
Trump is at 41 or lower in all of them.https://t.co/OE6yHJqoWB
There are, of course, more than four months until polling day, for Trump to turn things around. As we are constantly reminded, remember what happened in 2016. Biden, however, is considerably further ahead - by around 5% - in the polls than Clinton was at this stage.
Moreover as an incumbent, there is even less historic precedent for such a turnaround. No incumbent president has won from being further behind than 2.7% at this stage.
Of the elected presidents who came from behind to win re-election, how behind were they?? Bill Scher (@billscher) June 24, 2020
Obama trailed Romney by 1.5 (RCP avg, mid Oct)
Bush trailed Kerry by 2.7 (RCP avg, mid July)
That's it. Those are the only comebacks by an elected incumbent.
Trump is now behind by 10.1.
Anti-Trump majority unlikely to switch
Having long argued that there is a clear anti-Trump majority and that this election would be a referendum on him, I have no intention on reversing my series of lays on him (average 2.22).
For those in a similar position, my advice is to stay the course - Biden's odds will go shorter. Most opinions regarding Trump are entrenched. His near-universally derided Covid management and flame-throwing response to the George Floyd protests have moved his negative approvals deeper in the red. From John Bolton's book to a plethora of scandals, the US news cycle is terrible for him.
If you do want to cash out - whether now or closer to election day or at different odds - don't back Trump in the main market. There is a smarter way.
Betfair's wide range of side markets is expanding - we can now trade the percentage for each candidate, distribution of electoral college votes and, critically, individual state betting.
State betting is best means to back Trump
For Trump to win the electoral college, he must win Florida. No other way. He could very plausibly win it, but lose the electoral college due to defeat in Pennsylvania. In all likelihood, he will need both, plus Wisconsin and North Carolina.
Democrats are favourites in each of those toss-up states and getting shorter as more dominant polls emerge. It makes far better sense to back Trump merely to win these states rather than the higher goal of next president.
To clarify, I'm not backing Trump for those states or anything else - at least yet. My prediction remains a Biden landslide. The two bands I like in the Biden Electoral College Votes market are 330-359 and 360-389 at around 5.79/2 and 7.06/1 respectively.