Friday 25 September 2020 10:00 am

US Election Betting: There's never been anyone like Trump

Paul Krishnamurty is a professional gambler and Betfair's political betting expert

Despite trading every major election since Betfair Exchange’s inception, I’ve never seen anything like Donald Trump versus Joe Biden. This will be the biggest ever betting event, surpassing the new records set at the 2016 EU referendum and US election.

The betting starkly contrasts polls. Betfair Exchange odds imply a 54% chance for Biden, compared to at least 77% on respected models. They are driven purely by supply and demand. Betfair report 80% of punters going for Trump.

Why? Most obviously, fear of history repeating itself, despite numerous differences with 2016. I wouldn’t rule out the celebrity factor. Trump cuts through like no politician ever. His presence transformed the 2016 betting – turnover rose sixfold on 2012. Love or hate him, everyone has an opinion.  

Read more: How might stocks react to a Biden win?

The betting public simply don’t know anything like as much about Biden. Whereas Trump has an army of supporters in every country. Predominantly male, as are gamblers.

A unique betting opportunity

To understand the scale and Trump’s numerical challenge, we must revisit 2016.

He and Clinton were the two least popular candidates ever. At this stage, up to 20% of the electorate were either undecided or supporting third parties, who went on to win a higher than usual 5.5%. Pundits misread how these unenthusiastic voters would ultimately break.

Trump’s winning path was a statistical freak. He lost the popular vote by 2.9m. His 46.1% tally was a point below Mitt Romney’s losing share in 2012 and 3% behind his own party’s national share on the same day, for the House of Representatives.

Yet he won the electoral college with an unlikely trio of gains, in Michigan, Pennsylvania and Wisconsin, by a combined tally of 77K. He became the first Republican to win there since the 1980s, but didn’t massively grow their voter base. Trump’s share in each was well below 50%. Without a strong third party, 50% or very close will now be required.

Clinton lost because turnout among key Democrat groups – black voters, millennials – fell short, to ruinous effect in Milwaukee, Detroit and Philadelphia. Since then, mid-term engagement among anti-Trumpers has soared. Turnout for the 2018 House elections rose to 50% from 36% in 2014, powering the party’s best result since Watergate.

Turnout will rise, offering greater growth potential to Democrats – whose supporters are historically less reliable. Trump’s victory was achieved with 63m. I estimate he needs at least 67m, perhaps 70m plus.

Where are these converts, who didn’t buy the MAGA enthusiasm when it was an exciting outsider bid but do now? Trump’s poor approval rating fell almost immediately after taking office. Those numbers have become entrenched, as are record-strong disapprovals.

That key trio of states clearly lean Democrat, as seen mid-term, whether in Governor, Senate, House or state races. A clear signal of anti-Trump motivation came when Wisconsin liberals formed extraordinary queues during lockdown to vote for their Supreme Court.

Betfair odds imply a 71% chance for Biden in Michigan, 67% in Wisconsin and 62% in Pennsylvania, compared to a mere 54% for the presidency. This doesn’t correlate. There is no plausible electoral path for Trump without at least one.

Biden can even win without Pennsylvania. If merely holding the states won by Clinton, four predictable gains will be enough – Michigan, Wisconsin, Arizona and Nebraska’s 2nd Congressional District.

Odds of 1.83 / 4/5 (54%) are a steal. At worst, I rate his chance around 75%. If you want to back Trump, take bigger odds for Pennsylvania or Arizona. No way will he win without either and he almost certainly needs both.

Odds correct at the time of writing, check Betfair Exchange for the latest US election odds. 18+ please gamble responsibly.