President Donald Trump delivered his first State of the Union address Tuesday night, and online political bettors on the PredictIt.org exchange correctly anticipated much of what the POTUS spoke about with one year in office under his belt.
Bait and Switch
While the White House told media beforehand that the speech would be a call for unity among a divided Congress, political bettors didn’t take the bait. Instead, they put money on the president touting his first year in office, and further pushing his agenda for Year Two. The main focus involved taxes, jobs, infrastructure, immigration, trade, and national security.
“This is our new American moment. There has never been a better time to start living the American dream,” Trump declared.
The president spoke at great length about the rising dangers in North Korea. PredictIt bettors saw that coming, with “Yes” shares of “Will Trump mention North Korea in State of the Union?” moving from trading at 74 cents on January 11 up to 93 cents mere hours before the POTUS was set to take the podium.
Bettors On Point
PredictIt users accurately forecast multiple outcomes relating to Trump’s 80-minute State of the Union speech. A few other speech excerpts that bettors got right included:
“Will Trump mention “fake news”? “No” shares were trading for just 77 cents on Tuesday afternoon, and the president didn’t use the term.
“Will Trump mention Obama?” “No” shares were trading for 68 cents late Tuesday, and while the president referenced his predecessor’s healthcare bill, he did not refer to him specifically otherwise.
Bettors also got it right in thinking Trump wouldn’t mention Sen. Chuck Schumer (D-New York).
The lone upset, and it was a minor one, came with PredictIt users guessing the president would mention his Supreme Court pick Neil Gorsuch (Yes 51 cents, No 49 cents). Trump opted not to praise the high court justice.
PredictIt is a real money exchange that sells shares of political outcomes. Correctly predicted shares are redeemed at $1 each. Bettors are limited to placing $850 on each market, or “contract.”
Bets for the Average Joe
PredictIt has been gaining in popularity since the 2016 presidential election. Bettors who took Trump at nearly insurmountable odds were handsomely rewarded for his upset over Hillary Clinton, prompting more gamblers to jump into the action.
The site’s $850 per market cap is designed to keep heavily bankrolled high-rollers out. Unlike daily fantasy sports, where just one percent of players account for over 90 percent of profits, PredictIt wants its market lines to form from multiple players, not a few bettors placing large amounts on any particular outcome.
“It’s really designed to prevent whales from coming in and either shifting the odds of something occurring or making a huge killing,” PredictIt CEO John Phillips told CNBC this week.
The CNBC story covered the growing pool of users who are trying to make the online site into a full-time living. One trader who showed the business media outlet his transaction history revealed roughly 5,400 trades during the most recent month, with a profit of $25,000.
Of course, not all are so ambitious. Most say they’re just looking to break even or pull in some extra spending money.
“I might get to the point where I’m making a few hundred dollars a week,” a political science major said hopefully.