US Election Betting Markets Set to Break Records, But Who Just Put $5 Million on Trump?
Posted on: November 3, 2020, 06:36h.
Last updated on: November 3, 2020, 09:18h.
The 2020 US election is expected to break records as the biggest political betting event of all time. But reports of a $5 million bet on Donald Trump suggest someone has smashed the record for the most money ever staked on a political outcome in a single bet, too.
The bet was placed this week at a “private bookmaker” based in Curacao, according to sources who spoke to the UK tabloid The Sun. The identity of the bettor is unknown, other than that he is said to be a British ex-offshore banker. The mystery gambler stands to win $15 million if his bet is successful.
In the regulated markets, Betfair said Tuesday that one customer had placed a £1 million ($1.3 million) bet on Joe Biden and expects to win £1.54 million ($2 million) if his bet comes in.
British bookie Ladbrokes Coral has estimated that £1 billion ($1.3 billion) could be bet globally on the presidential race.
How Do Bookies Predict Elections?
Political betting generally is not a big market for bookmakers in comparison with sports events. Betting companies’ marketing people love them, though, because these markets provide great fodder for news articles like this one, gifting operators some free publicity.
This election appears to be the exception. The $1 billion figure, if accurate, would put the election on the same level as an English Premier League match. Or, for more perspective, $6.8 billion is estimated to have been bet on the last Super Bowl.
Political betting is illegal in the US because of concerns it could undermine the integrity of elections. But in jurisdictions like the UK, Ireland, and Australia, there are no such qualms.
It’s a pity, because betting markets usually prove to be more accurate predictors of political outcomes than the notoriously unreliable polls. Maybe that’s because bettors who have money riding on an election are unlikely to vote against their own vested interests.
Meanwhile, poll respondents don’t always tell the truth. That’s often because they are too embarrassed to admit that they haven’t got around to registering to vote, or because they are more interested in giving the answer they think the pollster wants to hear rather than their own opinion.
More Bets on Biden
In the biggest political betting market, the UK, Biden is ahead. The British betting exchange Smarkets gives the Democrat a 65 percent chance of winning, while Trump is just 34 percent.
These results should be taken with a pinch of salt, because Brits have different political sensibilities than Americans, and crucially, they do not get to vote in the US election.
It’s more informative to look at the biggest US-facing offshore sportsbook, which takes bets from voting American citizens, albeit via the black market. This operator has Biden as an even bigger favorite, at -700 favorite to Trump’s +500. That represents an implied probability of 87 percent for a Biden win.
Of course, the polls and betting markets failed to predict a Trump victory in 2016, and they may do so again.