US Election Odds and Review: Projected result vindicates betting markets

The White House
The race for the White House was closer than expected

The signals from Betfair markets were always much cooler on Biden's chances than the polls. Paul Krishnamurty says the projected result vindicates that scepticism...

"Trump made this election a lot closer by energising his base like never before. For an incumbent to increase their popular vote by over eight million is quite an achievement, for which there was no conventional signal."

Calling a race in these ultra-partisan times is fraught with risk, but I'm confident we can safely conclude what the final result of the election will be. Joe Biden will win the electoral college by 306-232. The exact reverse of Donald Trump's margin over Hillary Clinton in 2016, albeit with a popular vote victory of around four to five million.

Biden fell short of a landslide

A comfortable enough victory by historical standards but not a blowout. To call it a landslide, Biden would have at least needed to take Florida.

Which brings us back to the question that has dominated the political forecasting community throughout 2020 - were the betting markets too favourable to Trump? Nobody has been more patronising on the matter than Nate Silver. This from last week wasn't his most dismissive comment by a long stretch:

Even those of us who shared Silver's expectation of a bigger Biden victory were taken aback at how touchy the FiveThirtyEight pundit seemed. How about actually running the race before judging the predictions?

Now we have, it turns out the signals from Betfair were superior to the forecasting models. Our electoral college prediction was around 290 to Biden, compared to 350-odd among pollsters.

State favourites prove reliable once again

The favourite won in 49 out of 50 states. Only Georgia broke the trend. None of the pollsters predicted Trump would win Florida or North Carolina.

This trend isn't out of the ordinary. In 2012, every state favourite won. In 2016, 45 out of 50 did. At the 2019 UK General Election, the favourite won in over 95% of our 650 constituency markets.

Odds factor in potential for volatility

When we consider the Next President odds, I think the sceptics are vindicated again. Yes, Biden backers won. But so too will the traders who laid him at 1.51/2 on the night, with a view to cashing out as his price drifted. He went as high as 5.24/1 in-running.

Such drama seems a fundamental part of betting on US elections. The way results come in inevitably skews the betting in one direction or another, as measuring what is left to come involves a level of expertise. As explained in my trading tips piece, the big urban, Democrat-leaning cities always declare last because they have more votes to count.

I'm sure next time this volatility will be factored in and bettors will be reluctant to hold onto any short-term positions. Even I'm seriously contemplating cashing out first next time. The best plan is to have a full bank, minimal exposure and a clear head to monitor dozens of markets simultaneously. There were big-priced opportunities galore to be found.

Shy Trumper theory stands up

But more than trading motivations, the long-term betting trends for this election revealed scepticism. That Biden was a strong enough candidate, or that the polls could be trusted. Belief in the 'Shy Trumpers' phenomenon turned out to be justified.

Whether we give it that label, or call them 'hard to reach' or 'reluctant Republicans', it is very hard to dispute now. Trump made this election a lot closer by energising his base like never before. For an incumbent to increase their popular vote by over eight million is quite an achievement, for which there was no conventional signal.

It was enough to defy the polls in Florida and North Carolina. But more telling is that Michigan and Wisconsin were even close, when numerous forecasts had Biden double-digits ahead.

Turnout is a perennial known unknown

This doesn't 'debunk' opinion polling science as some want it to. But it does show the potential for them missing tranches of voters, especially when there's a big jump in turnout.

The likes of Dave Wasserman, from Cook Political Report, have been flagging Trump's scope for growth among non-college educated whites in states such as Wisconsin for years. It would therefore be inaccurate to claim pollsters aren't aware. However it isn't easy to reach or measure previous non-voters.

Therein lies the biggest advantage of betting markets as a predictor. Polls are, by nature, tied to a rigid, scientific process, which can be flawed if the sample is wrong. When we see massive turnout, as in Europe, they tend to be more reliable but when turnout changes significantly as in recent US or UK examples, they can be blindsided.

In contrast, bettors are making more subjective arguments, based on a wider range of factors including known unknowns. We don't all agree by any stretch and there is no single judgement. The market is merely the product of supply and demand.

This time, that average assessment emerged looking good. The best way of identifying average market opinion is the electoral college handicap. The par line, trading at even money, was Biden -81.5 - equivalent to 310 votes. He won 306.

Follow Paul on Twitter and check out his website, Political Gambler.

2020 US Presidential Election: USA - Presidential Election 2020 (Next President)

Show Hide

Tuesday 3 November, 10.00am

Market rules

Back Lay
Joe Biden
Donald Trump
Kamala Harris
Mike Pence
Tim Kaine
Cory Booker
Hillary Clinton
Andrew Cuomo
Elizabeth Warren
Paul Ryan
Michelle Obama
Bernie Sanders
Marco Rubio
Michael Bloomberg
Julian Castro
Amy Klobuchar
John Kasich
Ted Cruz
Nikki Haley
Newt Gingrich
Ivanka Trump
Catherine Cortez Masto
Trey Gowdy
Mark Cuban
Caroline Kennedy
Al Gore
Mark Zuckerberg
Kanye West
John Hickenlooper
Dannel Malloy
Jay Inslee
Mark Dayton
Oprah Winfrey
Ken Bone
Dwayne Johnson
Eric Garcetti
Howard Schultz
John Delaney
Sally Yates
Deval Patrick
Bob Iger
Evan McMullin
Gavin Newsom
John Kerry
Kirsten Gillibrand
Al Franken
Tim Ryan
Steve Bullock
Roy Cooper
Sherrod Brown
Martin O'Malley
Tulsi Gabbard
Doug Jones
Mitt Romney
Nina Turner
George Clooney
Condoleezza Rice
Jason Kander
Michael Avenatti
Tom Cotton
Ben Sasse
Eric Holder
John McAfee
Candace Owens
Stephanie Clifford
Maggie Hassan
Elon Musk
Beto O'Rourke
Bill de Blasio
Rahm Emanuel
Oscar De La Hoya
Sarah Palin
Andrew Gillum
Richard Ojeda
Eric Swalwell
Andrew Yang
Tom Steyer
James Mattis
Angelina Jolie
Joe Kennedy
Larry Hogan
Pete Buttigieg
Stacey Abrams
Terry McAuliffe
Wayne Messam
Bill Weld
Michael Bennet
Jon Stewart
Seth Moulton
Mike Gravel
Marianne Williamson
Joe Walsh
Nancy Pelosi
Gretchen Whitmer
Jesse Ventura
Justin Amash
Val Demings
Keisha Lance Bottoms
Mike Pompeo
Donald Trump Jn
Liz Cheney
Jim Jordan
John Bolton
Kevin McCarthy
Susan Rice
Tammy Duckworth
Ben Carson
Rand Paul
Mike Huckabee
Rick Perry
Josh Hawley
Ron DeSantis
Rick Scott
Valerie Jarrett
Karen Bass
Nadja West
Gina Raimondo
chuck grassley
Kristi Noem
Jo Jorgensen
Howie Hawkins
Mark Esper
Patrick Leahy

Bet slip


Get a Free £/€20 Exchange Bet

  • Join Now - Open account using promo code VAL225
  • Bet - Place a £/€20 Bet on the Exchange
  • Earn We'll Refund You £/€20 If the Bet Loses
Bet now

T&Cs apply.

Discover the latest articles

Read past articles