US Election Odds and Bet of the Day: Bank on Biden in Pennsylvania

Back Biden to win Pennsylvania @ 1.594/7

It cannot be stated often enough. Anyone backing Trump at current odds is betting on the biggest misread in opinion polling history. At this morning's odds, there is literally no correlation.

Biden's odds now very attractive

For most of 2020, Trump's popularity in the Next President market has created arbitrage opportunities for those prepared to hedge with the state and handicap markets. Those opportunities started to dry up over the past week as traders take advantage. Consequently, Biden's odds are drifting to very attractive levels everywhere.

I've repeatedly observed how Trump needs to win Pennsylvania to have any realistic chance. That may explain Biden's drift from 1.251/4 to today's 1.68/13. There certainly isn't an explanation to be found in the polls.

Apart from one outlier poll from a rarely seen, yet B- rated firm Insider Advantage, Biden hasn't led by less than 4% with anyone rated higher than B/C (according to Fivethirtyeight rankings) since October 4th.

Polls overwhelmingly favour the Democrat

The latest numbers from top-rated pollsters were +7 with Muhlenberg (A+), +6 with Suffolk (A) and +5 with Fox (A-). Fivethirtyeight estimate Biden has an 86% chance. Yougov say 94%. By huge contrast, today's odds imply a 63% chance.

Why the drift? I reckon three factors. First, traders hedging anti-Trump positions. Second, Trump is doing numerous rallies there. Third, exchanges in the final debate. The Trump campaign are telling anyone who will listen that Biden will end fracking - a touchstone issue in 'Coal Country'.

Only the first of those vindicates the market trend. There's no evidence whatsoever that Trump rallies convert voters who weren't already solidly in his camp.

Fracking row probably overstated

The fracking row (which Biden is adamant is a misrepresentation) may not be so damaging. The voters who will be turned off may very well be Trump voters anyway. Whereas taking climate change seriously will play very well with younger voters, and perhaps in the critical suburban battleground too.

Once again, there is a misunderstanding about the events of 2016 in play. Pennsylvania is a blue-leaning state, with a Democrat Governor, which hadn't voted Republican since the 1980s. Trump won with only 48% and will need to improve, substantially, to win again.

Trump only won due to differential turnout

Turnout in Philadelphia fell, notably among black and young voters. They are the key to any successful Democrat campaign there. In stark contrast, the enthusiasm for Trump in rural counties was extraordinary. I spent several weeks touring the state during 2020 and these dynamics were commonly agreed by supporters of both sides. The effect was a wafer-thin 44K victory for Trump.

We won't see a repeat of those dynamics. The early vote shows the Democrats building a vast lead and much greater enthusiasm from those two key parts of their base.

Finally, it can only help that Biden is from Scranton. His line that the election is between "Scranton and Park Avenue", the little guy versus the billionaire, should resonate. Its another important difference with Clinton, particularly here in the Rust Belt.

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