Joe Biden’s massive lead in the Bonus.com Election Tracker he enjoyed all summer long evaporated this week as betting markets pushed the race into the “dead heat” category. But if you looked at recent polling from major media outlets, the presidential race continues to be Biden’s to lose. So why the disparity among the two measuring sticks?
Betting markets are controlled, primarily, by bettors. In Las Vegas, odds and betting lines are moved by the volume of wagering and computerized prediction models. In a betting market, the odds are determined solely by the action of bettors. While this approach does provide a more lively and entertaining conversation, betting markets have inherent flaws.
Polling, on the other hand, takes a scientific approach to discovering trends in political elections. While several sites aggregate polling, FiveThirtyEight.com has gone a step further. The site uses polling to facilitate its prediction model to arrive at a series of probabilities.
So what are the betting markets and FiveThirtyEight telling us about the 2020 Presidential election? Could Trump be shaping up his campaign for another upset come election day?
What are the 2020 Presidential Election Odds for Betting Markets?
In the latest Bonus.com Election Tracker, the betting markets swung mightily toward Pres. Trump over the past week. Since Aug. 12 when Biden had a 20-point lead in the tracker, Trump has significantly closed the gap. Although most predicted the race would eventually tighten, having the public push Trump heavily, despite the polling, has come as a mild surprise.
While four of the five markets still give Biden the lead, Betway gives Trump a slight edge. At Betway, the current implied odds for Trump are holding at -120 with Biden at -105.
The only betting market that compares similarly to Biden’s sizable national polling lead is PredictIt. At 270towin.com, the site has created an electoral college map using PredictIt’s betting market. Currently, Biden holds a 319 to 219 advantage, with only Florida outstanding.
At PredictIt, Biden holds implied odds of -138 to win, meaning you would have to bet $138 to win $100. In comparison, Trump’s odds stand at +127 using the PredictIt market.
Why Have Betting Markets Moved Toward President Trump?
One of the biggest reasons why betting markets have moved toward Trump involves his electoral college advantage. Even if Biden wins the national vote by a larger margin than Hillary Clinton’s win in 2016, he still needs help to get to 270 electoral votes.
Nate Silver tweeted on Sept. 2 that a 3-4 point win in the popular vote gives Biden just a 74 percent probability of winning the electoral college. Even if Biden bumps that vote total to the 4-5 percent level, Trump still has an 11 percent chance of re-election.
In 2020, six states will most likely decide the election. Minnesota, Wisconsin, Michigan, North Carolina, Pennsylvania, and Arizona, states won by Trump in 2016, are back in play this year. A narrow victory by Trump in a few of these states would get him over the 270 electoral vote threshold.
Even if Trump’s magic doesn’t work again in 2020, the belief that the election will once again be close has caused bettors to push more chips to the President’s side of the table.
Why Does FiveThirtyEight Favor Biden?
In the wake of Donald Trump’s 2016 Presidential Election win, polling took at huge hit at the national and state level. But after a deeper look, many political experts suggested the polling was on target with a few minor, but consequential, exceptions.
In 2016, when other prediction models were giving Donald Trump a single digit percent shot to win, FiveThirtyEight gave him a 29% chance of taking the presidency. The site’s model had predicted a higher probability for Trump due solely to his electoral college advantage.
In response to the perception of polls failing in 2016, FiveThirtyEight now weighs each poll for accuracy. When a poll comes out from a leaning pollster, such as the Republican-favored Rasmussen, FiveThirtyEight adjusts the numbers concerning their model to better portray the voting landscape.
Biden’s national and state polling lead remains a strength that certainly favors the former vice president in prediction modeling.
FiveThirtyEight lists Biden with a 71% probability of taking the presidency based on their model and current polling. To translate in betting odds, Biden would be -245 at your favorite betting window to win. In comparison, Trump would hold +245 on the moneyline to win re-election.
The wildly different odds between betting markets and FiveThirtyEight shows potential value in using the site’s model when wagering. This belief was echoed recently by FiveThirtyEight’s founder Nate Silver.
Silver has regularly written that he is not a fan of using betting markets as a probability indicator. On Aug. 30 he tweeted “Political betting markets have become so dumb as to perhaps be a contrarian indicator at this point.”
With less than 60 days to election day, choosing between the beliefs of the betting public and private polling could create a windfall for the savvy bettor.