The recent presidential election showcased an interesting dichotomy between betting odds and traditional polling methods when it came to predicting the outcome. As Donald Trump secured a landslide victory over Vice President Kamala Harris, a significant pattern emerged: betting odds were a more reliable indicator of the election result than the forecasts provided by several prominent polling experts.
Polling Predictions
On Election Day, various polling entities presented a picture that implied a nail-biter of a contest. Notable polling analysts, including Nate Silver of FiveThirtyEight and The New York Times, characterized the race as essentially a 50-50 toss-up. Meanwhile, The Economist posited a slight edge for Harris, giving her a 56 percent chance of winning. These predictions, however, would soon be overshadowed by the outcomes reflected in betting markets.
Betting Odds and Their Implications
In stark contrast to polling, betting markets leaned heavily in favor of Donald Trump. By Tuesday afternoon, Trump was a solid -162 favorite on offshore sportsbook BetOnline, meaning that to win $100 on Trump, a bettor needed to wager $162. This implied a 61.8 percent chance of victory. Early results on Election Day caused a brief and minor dip in Trump’s odds to -145, but this was short-lived. By 5 p.m., his odds significantly rebounded to -225, eventually reaching -320 by 6 p.m., marking Trump’s highest odds during the campaign.
This dynamic reflects the volatility of betting markets in response to early results. Notably, Trump had experienced fluctuations in his odds throughout the campaign, including a significant spike to a -300 favorite after surviving an assassination attempt in July. Despite Harris momentarily flipping to a slight favorite after the Sept. 10 debate, Trump regained and maintained his status as betting favorite leading up to the election.
The Final Push and Results
As the votes began to be counted, Trump’s odds soared to -2,500 at BetMGM in Ontario, where the sportsbook was one of the few locations accepting bets on the election. Paul Krishnamurty, a political oddsmaker at BetOnline, commented on the power of betting markets to predict outcomes accurately, suggesting they had outperformed traditional polls.
The betting markets’ predictive capabilities were again validated as Trump’s odds reached impressive levels; by 9:30 p.m., he was listed at -1,200 to win the popular vote. Surprisingly, Trump ultimately won the popular vote, surpassing Kamala Harris by almost 5 million votes. This marked a rare achievement, making Trump the first Republican to claim the popular vote since George W. Bush in 2004.
Polls vs. Reality
Even as polling organizations adjusted their methodologies to account for past inaccuracies, Trump’s performance exceeded their estimates by at least five percent. For instance, polls suggested a closer race in Iowa, where a Des Moines Register/Mediacom Iowa poll indicated Harris leading Trump by three points. However, the betting markets had Trump as a strong choice, and he ultimately bested Harris in Iowa, capturing 55.9 percent of the vote.
Historical Context
The accuracy of betting markets is worth examining in a historical context. In the last 27 presidential elections, oddsmakers successfully predicted 23 outcomes. Over the past 104 years, only four betting underdogs have won the presidency on Election Day, reinforcing the notion that betting markets often provide a clearer picture of expectations going into the vote.
Economic Trends and Participation
Large sums were exchanged in the run-up to the election, indicating strong participation in the political betting market. Platforms like Kalshi and Betfair also reflected Trump as the favorite, with Kalshi processing over $430 million in trades and Betfair $321 million. BetOnline, which operates unregulated in the U.S., also benefitted substantially from the election.
Krishnamurty reported a mixed bag for the sportsbook, noting that while large wagers favored Trump, the majority of bets leading up to the final days were placed on Harris, indicating a disconnect between public sentiment and predictive betting markets.
Conclusion
In conclusion, the 2024 presidential election serves as a compelling case study highlighting the limitations of polling in predicting electoral outcomes, particularly in contrast to the predictive accuracy of betting markets. As experts continue to analyze this election cycle and its implications for future races, the lessons learned from the discrepancy between betting odds and polling predictions will likely influence both electoral strategies and public perceptions in the years to come. As the landscape of electoral forecasting evolves, the role of betting markets may become increasingly prominent, challenging traditional paradigms of polling and prediction analysis.
