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Betting Markets Show A Bleak Picture for Democratic Presidential Hopes

James Murphy by in Politics on

Not long after the smoke had cleared on Joe Biden’s impressive Super Tuesday performance I posted updated odds on the Democratic Nomination and the Presidential race. Based on my numbers, Biden has the nomination all but sewn up. Since then, sportsbooks around the world have updated their numbers on both the Democratic nomination and the party’s chances of recapturing the White House. If anything, they portray an even worse situation.

I’ll preface this with my usual disclaimer: I consider my analysis of political matters extremely objective. I don’t vote and have voted only once in my life (for Ronald Reagan when I was 18 years old). I have my own principled reasons why I don’t vote but the important takeaway here is that I consider all politicians regardless of party affiliation to be cut from the same contemptible cloth. It makes no difference to me or my life who wins this or any election. Since I have occasionally been accused of ideological bias I always like to begin with this. Simply put–from a personal standpoint, I don’t care a bit what happens. Professionally, however, my job is to set odds and interpret betting market dynamics and for that reason you’ll find that my analysis is free from the typical partisan myopia.

JOE BIDEN HAS ALL CLINCHED THE DEMOCRATIC PRESIDENTIAL NOMINATION

Immediately after Super Tuesday, I posted Joe Biden as a -750 favorite to win the nomination. Now that sportsbooks all over the world have weighed in with their odds, it turns out that I was right in the middle of the current range of prices. BetOnline.ag has Biden as a -500 choice to win the nomination. In the UK betting marketplace where political wagering is extremely popular and vigorous Biden is in a range from a low of -400 to a high of -900. The average of the nearly two dozen books I looked at is somewhere between -500 or -600.

To the uninitiated, the strength of Biden’s situation might be better understood by looking at the implied probability implicit with these prices. The implied probability ranges from 80% at -400 to 90% at -900. The difference between -400 and -900 is definitely significant to a bettor but as a metric of Biden’s chances to win it is less so as the wide range still shows that he’s an overwhelming favorite to claim the nomination.

This means Sanders’ campaign is in bad shape and far from the viable candidate portrayed by his fanboys and the US media. The rest of the Democratic field has it even worse. Elizabeth Warren is priced between +5000 and +15000 suggesting an implied probability between 0.7% and 2%. Tulsi Gabbard is at +20000 or +25000 at most books giving her an implied probability of 0.5% to 0.4%. How ugly are these numbers? Ugly enough that both Hillary Clinton (+2000 to +2500 for an implied probability of 4.8% to 3.8%) and former first lady Michelle Obama (+10000 for an implied probability of 1%) are given better chances of winning the nomination than any candidate other than Biden and Sanders.

THE DEMOCRATS VERSUS TRUMP

Objectively speaking, Biden offers the Democrats the best chance of beating Donald Trump and regaining the White House. The bad news is that while he might be the party’s best option he’s not necessarily a good option. The odds on the general election don’t look favorable for Biden and Democrats. Even more alarming–the situation is deteriorating from the Democrats the more that their field of candidates is narrowed down. It’s supposed to work the other way around. Donald Trump is a -150 or -160 favorite to be re-elected which is carries an implied probability of 60% to 61.5%. In mid-December when there were still more Democratic candidates than anyone could count Trump was priced as a small underdog of +125 or thereabouts.

The dynamic for the Democrats is simple and yet tough to overcome. Trump has his supporters–and likely voters–more energized than any hypothetical Democratic candidate. The reason that Trump became President in the first place is that the Democrats operated under the delusion that the entire population of the United States finds him as contemptible as they do. The implicit message in 2016 was ‘Hillary isn’t a great candidate but at least she isn’t Trump’. Biden might be more personally likable than Hillary but it’s unlikely that he’ll excite his voting base any more than she did. Trump’s supporters are more enthusiastic and that will likely translate into better turnout giving him an inside track to winning the same states that he did in 2016.

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