The Betfair Prof / Leighton Vaughan Williams / 10 November 2008 /

Why has the issue of one Electoral College vote from last Tuesday's Presidential Election caused such a fuss on the Betfair markets? The Betfair Prof, Leighton Vaughan Williams, tells all...

"Good news for Barack Obama supporters", declared the Omaha World-Herald. "His odds of bagging an electoral vote in Nebraska grew stronger Thursday, with word that 10,000 to 12,000 early ballots and 5,200 provisional ballots are left to count in Douglas County. Obama won about 61 percent of the early votes counted before Tuesday's election. If that percentage holds with the early ballots left to count, Obama stands a strong chance of winning the Omaha-area 2nd Congressional District.

Republicans did not concede defeat Thursday, but they acknowledged the long odds. John McCain held a 569-vote lead over Obama in the 2nd District at the end of Tuesday. I will remain cautiously hopeful but not cautiously optimistic," said Hal Daub, state director for McCain. "I'm disappointed (in the numbers). We really worked hard here, against substantial resources being poured into Nebraska."

That's right. McCain's own man on the ground was "cautiously hopeful but not cautiously optimistic."

Nate Silver, who runs the excellent www.fivethirtyeight.com election website, headlined the story with the banner, 'What Remains Uncalled'. "The single electoral vote in Omaha remains uncalled, but it looks like Obama will win it," he wrote. This was the last of the five Nebraska electoral votes to be decided (in Nebraska, the state does not allocate all of its votes as of right to the winner of the state's popular vote).

Note that the call in favour of Obama was not just an unsupported assertion, but an argument based on solid electoral maths. The Democrat had picked up 61% of the counted early votes and between 10,000 and 12,000 were left to count. Even taking the lower estimate, that tallies to a majority of more than 2,000 votes over McCain, unless there was something very unrepresentative about the early votes counted. That would mean McCain bagging a huge proportion of the provisional ballots, many of which are likely to turn out to be invalid in any case.

Yet visitors to the Betfair election handicap market (Obama minus 190.5 electoral votes) were treated on Friday to many and various offers of solid odds against the Democrat, when just one electoral vote in Nebraska would beat the handicap in favour of Obama. What is a trader to do in the circumstances? Were those offering generous odds about President-elect Obama in possession of information unavailable to the Omaha World-Herald, to Hal Daub, Nebraska state director for McCain and to Nate Silver, or were they simply confused, unaware that Nebraska can split its electoral votes and that informed opinion was buzzing that it would do so.

By Friday evening you had your answer, courtesy of KPTM FOX 42 News.

"Obama Wins Omaha Electoral Vote", blazed the story. "Douglas County election commissioner Dave Phipps confirms to KPTM FOX 42 News that President-elect Barack Obama has won Nebraska's second district electoral vote ... This is the first time a Nebraska electoral vote has actually split to another candidate". In fact, there are still provisional ballots to count but McCain's state director has already congratulated Obama on his victory.

If it looks too good to be true, it usually is. But not always!!

Professor Leighton Vaughan Williams is the Director of the Political Forecasting Unit and Betting Research Unit of Nottingham Business School, Nottingham Trent University

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