A couple of months ago we put together our own look at the betting on the US Presidential Election (see below) and now that it’s just over a couple of weeks until the election, we thought we would take another look at the markets.
First up we hope you took our tip on Kamala Harris to be Joe Biden’s Vice Presidential pick at 1.92 as that bet has already won.
Next President Market
Moving onto the main market of the Next President, it is looking like being the most gambled-on market in Betfair history, with over £137m already having been matched.
Back in our August preview we remarked on what great value we felt Joe Biden was at 1.64 to win. Two months on and quite incredibly, despite the polls moving more in his favour and a series of missteps from Donald Trump, Biden is still available at 1.58 at the time of the writing.
Frankly we find these odds almost unfathomable and cannot believe the value on offer. Let’s have a look at the various forecasters’ average national lead for Biden, at the time of our August preview and then today:-
|Forecaster||August Biden Lead||17th October Biden Lead|
|Real Clear Politics||+6.4||+8.9|
As you can see, the average lead for Biden has grown since August. If you look at the forecasts of Biden’s chances of winning, they have also grown:
|Forecaster||August Biden % Chances||17th October Biden % Chances|
|Real Clear Politics||–||–|
So again, a strong 7% move in Biden’s favour in terms of his chances of winning, which now average 91% amongst the forecasters. On that basis, Biden’s odds should be around 1.1, not 1.58.
Finally, looking at the swing state polling from Fivethirtyeight.com compared to August you have:
|State||Fivethirtyeight Biden polling average 6th August||Fivethirtyeight Biden polling average 17th October|
Biden is now further ahead in the swing states than he was in August and importantly he is well clear in the three key Mid-West states of Michigan (+7.8), Pennsylvania (+6.8) and Wisconsin (+7.7). Win those plus the states carried by Hillary Clinton in 2016 and Biden would be elected President. He wouldn’t even need any other states, but a number of the other swing states are also looking good for him including Arizona, Florida and North Carolina.
Crucially now there is a lot less time until the election for things to change and polls become much more predictive the closer you get to election day.
We mentioned last time that the other advantage for Biden is that due to the coronavirus pandemic a lot of people were likely to vote early to avoid standing in long lines on Election Day. Well that is exactly what is happening, with a staggering 25 million people having already voted with still over two weeks until Election Day.
So far the Democrats have a big advantage in terms of who has voted already according to party registration data, although in reality we shouldn’t read too much into that. What is more important is that forecasters predict over 60% of people are likely to vote before November 3rd, meaning Joe Biden’s 9-10 point advantage could already be baked in before the day of the election, giving Trump a mountain to climb on the day itself. Having more of your supporters vote early also allows the party to allocate resources more accurately in their get-out-the-vote efforts on election day itself.
Back in August we said that this election was all about the coronavirus pandemic and whilst a few other issues have popped up in the intervening period, essentially that still remains the case. It is the number one issue for most voters in polls and Trump’s bungled handling of it has greatly hindered his chances, particularly with seniors (those aged over 65). Whilst Republicans have tended to win this group by around 10 points over the last few elections, polling points to Biden being at least tied, if not ahead with seniors this time. Given that voters under 40 overwhelmingly vote Democrat and are looking like voting by a 2-1 margin for Biden this time, losing seniors all but dooms Trump’s hopes in this election.
We also said last time that other than a coronavirus vaccine being found before the election we couldn’t see how Trump could win reelection and we suspect even that wouldn’t be enough to save him now, as the impact both economically and politically would take time to be felt by the electorate and there is just so little time left now.
So barring some other earth-shattering event or monumental scandal involving Biden, it really does get tough to see how Trump could move the needle enough to be competitive again.
As we say, the odds for Biden should be around 1.1 right now rather than 1.58, so this represents exceptional value. We really can’t understand why the odds are so high. Clearly there has been a reaction to 2016 and people are scared it could happen all over again. But this is not 2016. Biden is well ahead of where Hillary Clinton was at this point, he has much better favourability ratings than she had, is consistently polling above 50% which Hillary Clinton very rarely did and there are far fewer undecided voters this time.
The only question left is whether the polls could be wrong. People point to the polls being wrong in 2016, but in fact the national polls were only one point off the actual final result according to the Real Clear Politics Average going into Election Day. On most occasions polling averages are only 1-2 points off, so we would have to be talking about something unprecedented and frankly crazy for the polls to be off by like 7-8 points to give Trump a chance.
There are some (perhaps justified) fears that Trump will not concede the election and will claim (without evidence) that there has been massive “voter fraud” over mail-in voting. However, if he loses by anything like as much as current polling suggests, that line just won’t be sustainable and we can’t see how Biden won’t be declared President and installed in the White House, even if they have to literally drag Trump out – which ultimately we don’t think he will want the humiliation of.
The odds on Biden may be so high primarily because of Trump supporters piling into the betting markets in the vain hope that another huge upset occurs.
Barring some earth-shattering event occurring (e.g. WW3) however, we just can’t see it happening and think there is great value to be had in a number of markets right now.
Back Biden to be elected the Next President at 1.58 – 10 points (or 15 points if not backed already at 1.64)
Back Biden with Electoral College handicap of -48.5 at 1.74 – 3 points
Hedge Biden Electoral College Votes of 330-359 at 5.8 & 360-389 at 8.0 – 1 point each
Back Biden to win Arizona at 1.7 – 1.5 points
Back Biden to win Florida at 1.85 – 1.5 points
Back Biden to win Michigan at 1.4 – 5 points
Senate Majority Market
We remarked back in August on the favourable odds of a Democratic majority in the Senate, but unfortunately we didn’t notice Betfair’s absolutely ludicrous rules for this market. For some ridiculous reason we cannot fathom, they have decided to make the rules so that Democrats’ total won’t include Senators Bernie Sanders and Angus King Jr, who are officially “independent” but for every practical purpose are Democrats – they caucus with the Democrats, vote with the Democrats, raise money for and from the Democrats – hell, Bernie Sanders even ran to be the Democrats’ candidate for President, twice!
Lord knows what has possessed Betfair to do this. It has completely screwed up this market and I can see an endless series of complaints and anger from Betfair customers who may not have realised. Completely and utterly ridiculous.
Anyway, the good news is that if you did hedge the Democrat Majority/No Majority following our advice last time you can still trade it out for a small profit and that is what we recommend you do. Essentially to back a “Democratic Majority” on that market you are now betting that they get 53 seats or more. That looks a bit of a stretch to us and it’s tough to call if they will get there – we think 50-52 is the likely mark, barring any big upsets on election night.
Strangely very few bookies have priced up this market either and given the vagaries of it you may be best leaving it alone.
If you want a bet, check the bookies’ terms and conditions first as to how they will count the two “independent” senators who caucus with the Democrats.
No bets – cash out of Betfair market (for small profit) if you hedged the Dem majority/no majority recommended previously.
The betting in individual Senate races is more straightforward thankfully, and the Democrats are poised to pick up some key seats. We like their chances in Maine, Iowa, North Carolina and Arizona.
Plus there are some interesting “long shot” bets worth considering, in South Carolina (current odds 2.75 in a race that is essentially tied) and Alaska (the Independent is 3.0 in a close race). We wouldn’t have those as official bets but in the scenario of a Biden landslide (v much possible) these could be in play.
Democrats to win Maine at 1.33 – 5 point bet
Democrats to win Iowa at 1.73 – 2 point bet
Democrats to win North Carolina at 1.57 – 4 point bet
(Previously recommended Montana and North Carolina for the Dems – do not back again if you already backed them. Montana could be worth a small interest for the Dems at 2.25 if you haven’t backed it already).
The Democrat price of 1.13 still represents value if you wanted to back at those odds, but sadly there is not enough liquidity in any other markets to make it worthwhile betting in them.
There may also be some in-play opportunities on election night itself. Basically there is a chance that the early returns will favour Trump, as it will take states longer to count the mail-in votes that will heavily favour Democrats. So it may look like Trump is winning early on, causing the odds to move in his direction and representing a good trading opportunity.
However, the potential snag in this theory is that Florida will be one of the first to report results and they count their mail-in votes as they come in. If Biden wins Florida then the race is all over – Trump cannot win the election without Florida. So the result may become clear early in the night.
Anyway, it will be something to keep an eye on. If the early returns favour Trump there could be a trading opportunity, as long as Biden isn’t clearly ahead in Florida.
Biden is fantastic value currently and we are keen to find some more bets on markets backing to him to win in a landslide, which we believe is very much on the cards. We will keep a look out for any value that pops up and may post some more bets before election day.
An Early Look at the US Presidential Election Betting
6th August 2020
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.
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.
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
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:
- – Colorado
- – Arizona
Then the Republicans are likely to pick up:
- – Alabama
There are then the following races that look pretty good for Democrats, what we would rate as “Lean Democrat”:
- – North Carolina
- – Maine
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:
- – Georgia
- – Montana
- – Iowa
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.
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.
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.
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.