It is now less than three moths until the US Presidential Election when Donald Trump faces off against Joe Biden. It is sure to be a hotly contested election and being held in the middle of a pandemic makes it unprecedented in modern times.
We have done very well with our political betting predictions in the past so thought it would be a good time to take an early look at this year’s betting.
We will preview a number of different markets in turn and see where the value lies.
Next President Market
First up is the biggest market of all: who will win the Presidential Election. At the moment we think Joe Biden represents excellent value at 1.64 to win.
Looking at the various forecasters’ models, you have Biden with average national leads of:
- – Fivethirtyeight: +7.6
- – Economist: +10.6
- – JHK Forecasts: +8.5
- – Real Clear Politics: +6.4
- – Leantossup: +12
So quite a wide spread of forecasts there but Biden’s national lead varies between six and twelve points, which would be a landslide either way.
Of course the election isn’t decided by the national popular vote but instead at a state level via the Electoral College. Looking at the key swing states, according to Fivethirtyeight we have the following leads:
- – Arizona: Biden +3.5
- – Florida: Biden: +5.1
- – Georgia: Trump: +0.9
- – Iowa: Trump: +1.4
- – Michigan: Biden: +7.7
- – North Carolina: Biden +2.3
- – Ohio: Biden +0.2
- – Pennsylvania: Biden +6
- – Texas: Even
- – Wisconsin: Biden +7.4
It is a very positive picture for Biden, in particular that he has big leads in the three key Midwest states that he needs to win the election: Michigan, Pennsylvania and Wisconsin. What is even more encouraging is that his lead in those states is pretty similar to his national lead – suggesting that Trump may not have such a commanding Electoral College advantage in those areas as he had over Hillary Clinton last time.
An alternative route to the White House for Biden would be to simply take Florida plus Michigan, which again he looks in a good position to do right now.
In addition to the polling-based forecasts, history professor Allan Lichtman, who uses an entirely different model for forecasting elections and has correctly predicted every presidential election since 1980 (if you allow him an adjustment for the electoral college/popular vote divergence in 2000), also called the Election for Biden yesterday.
JHK Forecasts currently has Joe Biden with an 82.7% chance of winning the election.
So given Biden’s commanding lead in the both national and state-level polls and some forecasters giving him a 90%+ chance of winning, why the odds of 1.64?
Well there’s a simple answer to that question: 2016.
Yes, pollsters, forecasters, pundits and especially gamblers are still haunted by the ghost of 2016 when everyone (well, almost everyone) predicted a thumping Hillary Clinton win. Remember those NY Times models showing her with a 95% chance of winning?
It is worth pointing out however that most pollsters have adjusted their modelling to give more weight to voters’ education, which they failed to do in 2016. In simple terms voters with low levels of education voted more strongly for Trump in 2016 than expected and this accounted for a large degree of pollsters’ error last time. This has supposedly been adjusted for this time.
The other factor of course is that there are still nearly three months until election day and a lot could happen between now and then. This is true, although short of a vaccine being found for coronavirus or some other earth-shattering event, we find it difficult to see how things could turn around dramatically enough for Trump to emerge victorious.
The covid crisis is only getting worse in the US, particularly in many of the key swing states where the election will be decided. Even if these states went into complete lockdown, it would take up to three months for the virus to be contained, as we have seen in Europe. However, it doesn’t appear these states are going into full lockdown so it is likely that covid cases and sadly deaths will continue to be high, which is bad news for Trump who surveys show is perceived to have handled the crisis poorly. The consequent economic damage of the ongoing pandemic will also hamper his chances of reelection. As we say, it seems only a vaccine being found could conceivably change the mood enough and create economic optimism to the extent that Trump would be back in with a chance.
Even worse for Trump however is that a number of the key swing states have early voting. This means people can vote up to five weeks before election day, either in person or by mail. Surveys suggest over 60% of people are intending to vote early, meaning Trump has even less time to turn things around – less than two months now until early voting starts in some states.
On the flip side, one small note of optimism for Trump is that polls have started to show a small improvement for him over the last couple of weeks, so it could be worth watching if that continues.
Without a dramatic move in his favour though we can only see one result at the moment and that makes the 1.64 on Joe Biden look very good value right now. If his polling leads are anything like this going into October/November then the odds are likely to be in the 1.2 to 1.3 range.
Recommended Bet: Joe Biden @ 1.64 (Betfair exchange)
Vice Presidential Pick
Biden will pick his candidate for Vice President soon and it looks likely it will be Kamala Harris. Biden has already said he will pick a woman and more recently said he would like to choose a woman of colour.
The field has narrowed down to a shortlist of three or four and the frontrunners in the market are Harris and Susan Rice. It seems unlikely Biden would pick someone for Vice President who hasn’t been elected before so that casts doubt on Rice and leaves Harris as the clear and obvious choice. The only question mark against her is that she launched scathing attacks on Biden during the Democratic Primary TV debates, which caused some bad blood between them.
Senator Kamala Harris is the favourite to be Joe Biden’s running mate in November.
Short of other credible candidates though who would be “ready for the job on day one” as Biden has put it, he may be forced to overlook their previous tensions and go for the safe pick of Harris for his running mate.
Recommended Bet: Kamala Harris to be Biden’s pick for VP at 1.92
Senate Markets
The race for Senate is very interesting this year as it is so delicately poised. Republicans currently hold a 53-47 advantage in the Senate but are playing defence this time.
Of they key races, we currently see the following contests as likely Democrat pick-ups:
Then the Republicans are likely to pick up:
There are then the following races that look pretty good for Democrats, what we would rate as “Lean Democrat”:
So if those races go as we expect it leaves the race tied 50-50.
However, there are a number of toss-up races that could go either way, including:
Kansas would have been on this list too if Kris Kobach was the Republican candidate but he lost his primary race earlier this week which means the seat is likely to remain in Republican hands.
So essentially as we see it at the moment Democrats need at least one of these toss-up races to win a majority in the Senate. How it goes will likely depend on how the Presidential race turns out. Should Biden win by five points or more nationally then Democrats will almost certainly win back the Senate, as voters increasingly vote “down ballot” (voting for the same party in all races in their state, from President on down) these days.
The race for control of the US Senate is likely to be a closely-run contest.
If Biden wins by around 2-3 points, then the race for the Senate will become incredibly tight and we expect it may end up 50/50. Anything less than that though and the Republicans would be expected to hang on to the Senate.
At the moment the odds on Democrats winning the Senate look very appealing at around 3.0, although it might be prudent to also hedge on No majority at around 2.4. You may also want to wait to see how polls are shaping up a little closer to the election.
In terms of individual races, we like the following ones currently:-
- – North Carolina – Democrats 4/7 (Betfred, Betway)
- – Montana – Democrats 8/11 (Betfred)
As we say with overall Senate control though, it may be best to wait a little while to see how the national Presidential polls are shaping up because they will have a significant bearing on Senate races.
House Markets
In terms of the House of Representatives, the current odds of 1.14 for the Democrats look about right. There aren’t enough odds on individual races at the moment so we will have to wait until nearer the time for that.
Conclusion
So there are our early picks for the upcoming US elections. Unless something dramatic happens like a vaccine for coronavirus being found before 3rd November, it looks like Donald Trump is heading for defeat – and quite possibly a heavy defeat. The markets are still scarred by what happened in 2016 however so there is value to be found in backing Biden and the Democrats to do well in November.
