Betfair: What the markets look like days out from the US election
Normally, around one week out from polling day, we would expect to see relatively close convergence between Betfair estimates and polling models.
However there is nothing normal about either the Trump era or 2020. The two estimates have never converged during this cycle and the differential is more stark than ever.
At odds of 1/2 on the Betfair Exchange, Biden is trading at more generous odds than any of the last three US election favourites were at this stage, despite a vastly superior polling position.
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A consistent national lead of around 9-10 per cent would normally equate to odds around 1/7, at best.
There is similar divergence across all the key states, as illustrated by these comparisons with the Fivethirtyeight prediction model. Note their ratings are actually less pro-Biden than, for example, polling by The Economist and Yougov.
| Where? | Betfair implied odds of winning | Fivethirtyeight implied odds of winning |
| National | Biden: 67 per cent | Biden: 87 per cent |
| Minnesota | Biden: 75 per cent | Biden: 92 per cent |
| Michigan | Biden: 73 per cent | Biden: 94 per cent |
| Wisconsin | Biden: 71 per cent | Biden: 88 per cent |
| Pennsylvania | Biden: 67 per cent | Biden: 86 per cent |
| Arizona | Biden: 60 per cent | Biden: 66 per cent |
| Florida | Trump: 52 per cent | Biden: 56 per cent |
| North Carolina | Biden: 55 per cent | Biden: 65 per cent |
| Georgia | Trump: 57 per cent | Trump: 54 per cent |
| Ohio | Trump: 71 per cent | Trump: 58 per cent |
| Iowa | Trump: 60 per cent | Trump: 51 per cent |
| Texas | Trump: 70 per cent | Trump: 64 per cent |
In some cases the mismatch is arguably more extreme in states than nationwide – Michigan, Wisconsin, Pennsylvania Florida. I’d now say Biden for Michigan is an even better value bet than to win the presidency. A slam dunk.
That trend in the state markets is partly due to traders employing the sort of trade strategies explained in my column last week. Whilst still available, especially if using the six electoral college handicap lines, these glaring opportunities are closing.
As the list demonstrates, the betting favours Trump for every target. He remains a much more popular selection. Over the weekend, 6700 trades were placed on Betfair’s exchange for the incumbent, as opposed to 5250 for the challenger. They totalled £3.7m and £3.6m respectively.
Read more: Sajid Javid says Biden is best for Britain
The odds simply reflect that supply and demand. The industry expects the former trend to persist – many more bets will be placed on Trump. However we can only speculate how that dynamic will affect the late odds.
Academic research testing the accuracy of betting markets shows they become much more reliable indicators as election day approaches. We may therefore see closer correlation in the days ahead as more money enters the market.
Regarding those weekend statistics, it is worth noting those two days were relatively quiet on the exchange. Across the previous three days, over £20million was traded. The effect of that spike in volume was to drive Biden’s odds down markedly.
The big-hitters were getting involved. The biggest single bet of the campaign – £500,000 at odds of 8/15 – was placed on Friday.
Indeed all the top-ten biggest bets of this cycle were for Biden. There seems to be a trend where the market only moves significantly in his favour during the moments of peak liquidity – around the two debates, for example.
We know from elections across the world that volume always peaks late. In 2016, £75m of the £199m total traded for Next President occurred after polls closed. That total figure will be surpassed in the next few days, making this the biggest market in Betfair’s history.
Based on those trends, I expect Biden’s odds to collapse sharply before November 3rd. Unless something dramatic changes in the polls or news, my forecast is he’ll be a 1/4 (80 per cent) chance when polls close.
That is not a confident prediction, however, based on what has felt like an irrational market so far. Trump’s appeal to bettors is a unique phenomenon. His fame skews those supply and demand numbers.
One explanation – partisan betting – took a hit from a new poll. Betfair commissioned YouGov to poll UK voters on a range of issues regarding the US Election, the fascinating results of which were released today.
The poll found of those who expressed a preference, Biden had 80 per cent of the vote, with Trump just 20 per cent. Trump’s figure rises to 25 per cent among men, who make up the majority of bettors.
Given that most customers are in the UK, and the exchange doesn’t operate in the USA, it can’t therefore legitimately be claimed that ‘MAGA money’ dominates the market.
I suspect it has an effect at specific moments – the Republican convention, his return to rallies after suffering from Covid – but, cumulatively, will be overwhelmed by the overall weight of money.
Perhaps a better signal is that only 37 per cent regard Biden as ‘fit to to be next leader of the free world’. Regardless of what is happening on the ground stateside, the Democrat hasn’t cut through with the British public yet. No wonder perhaps, if they shy away from backing him at short odds-on.
Odds were correct at the time of writing, check Betfair Exchange for the latest US election odds. 18+ please gamble responsibly