Midterm Election Odds

Midterm Election betting isn’t legal in the United States despite legal sports betting existing in over 20 states. However, it’s a common desire among sports bettors who want to show their superior political knowledge. Online sportsbooks like DraftKings and BetMGM are not allowed to offer election betting, but the 2022 Midterm Elections had some platforms that did, like PredictIt.

Catherine Cortez Masto’s victory in Nevada secured Senate power for Democrats. Alaska’s senate race is still undecided, but it’s between two Republicans. So, Georgia will be the last close Senate election. Its runoff election will be on December 6.

Election Night Analysis

PredictIt balance of power prices flipped on Election Night. The price of a Republican House and Senate fell from 74 cents to 19 cents. The price of a Republican House and Democratic Senate rose from 24 cents to 64 cents. This dramatic price shift happened because Democrats fared better on Election Night than predicted. As of this writing, Democrats picked up two state Governor seats and secured the Senate for the third race in a row.

On November 16, Democrats lost the House of Representatives. Democrats outperforming lunatic candidates helped them in the midterms. But even cushioned losses couldn’t keep Kevin McCarthy from becoming the new Speaker of the House.

On December 6, Georgia will have its runoff election between Democrat Raphael Warnock and Republican Herschel Walker. (Chase Oliver, the Libertarian candidate, got just over 81,000 votes to Warnock’s and Walker’s 1.9 million each.)

PredictIt has been ordered to shut down in February 2023, so this is likely its final midterms.

PredictIt’s markets oscillating between two outcomes is less reliable than polls that admit the knife-edge key races can hinge on. PredictIt users have shown how much they’re reacting to polls rather than providing predictive analysis. It’s not a strong finish for PredictIt and could make legalizing future political prediction markets more difficult.

2022 Midterm Election Predictions

PredictIt is offering several prediction markets on the 2022 midterm elections. So, bettors who are interested can view these midterm election markets:

• Senate Control
• House Control
• Balance of Power
• Speaker of the House
• Senate Majority Leader
• GOP Senate Seats
• How To Bet On The Midterms

Senate Control

Control of the Senate will mean control of federal judge appointments and committee assignments for the next two years. The Senate Majority Leader can bring bills to a vote. They can also kill bills by keeping votes from happening on key bills.

A Democratic Senate means President Biden still has a chance to make progress on his agenda. In contrast, a Republican Senate would kill President Biden’s chances of confirming his desired judges and federal appointees.

Democrats won control of the Senate on Election Night and only had to wait for the Georgia runoff to see whether they had to share committee power with Republicans.   

Georgia Runoff Election for Senate

Democratic candidate, Raphael Warnock, won the 2022 Georgia runoff election. His victory gives Democrats Senate control of 51-49, giving Democratic Senate leaders full control of Senate committees.

Warnock won a special runoff election in 2020. This is his race for a full six-year term. His opponent, Herschel Walker, is the former college football runningback and Heisman Trophy winner. He’s also proven uninformed on topics from racism (Slavery ended 130 years ago), to climate change (Don’t we have enough trees around here?), to evolution (At one time, science said man came from apes…If that is true, why are there still apes?).

While Warnock is viewed more favorably, the Democratic party is viewed more negatively, resulting in a surprisingly tight Senate race in Georgia.

House Control

Control of the House of Representatives has important implications for the remainder of President Biden’s term. The House of Representatives introduces spending bills and it can introduce impeachment proceedings. So, the party that controls the House can introduce spending bills to force representatives to vote in ways that may make them look bad.

This round of House midterms will reveal whether MAGA or establishment Republicans have gained ground since the 2020 election and the January 6 attack on the Capitol. The midterms will hint at the type of Republican presidential nominee to most likely win the Republican nomination for the 2024 presidential race, too.

On November 16, Republicans flipped the House. Joe Biden’s agenda will be put on hold, but it’s not all bad news for Democrats. Kevin McCarthy’s slim majority will make the extreme wing of his party powerful. Every fringe Republican can threaten to withhold votes to push Republican House bills forward.

Balance Of Power

The balance of power between the parties in the House and Senate can expedite or stall a party’s legislation. If the same party controls both chambers of Congress, then legislators can speed legislation through. But if control of both chambers is split, then one party can stall the other’s legislation.

As of November 16, Republicans have retaken the House. It’s common for the opposing party to retake Congressional seats — and state governorships — during the midterms. But relying on conventional wisdom isn’t a reliable betting strategy. Every election cycle is a little bit different, and candidate quality matters across US Senate races.   

Speaker Of The House

The Speaker of the House is a related market to the House control betting market. While there are many possible Speakers, Kevin McCarthy and Nancy Pelosi are the only two serious contenders for the position.

This market’s outcome will depend on which party gains control of the House in 2022. If the Democrats retain House control, then Nancy Pelosi will likely be the Speaker. If the Republicans gain House control, then Kevin McCarthy will likely be the Speaker. Unless something drastic happens to either figure’s career, these are the two realistic outcomes.

PredictIt’s bettors believe that the Republicans will gain control of the House. So, Kevin McCarthy is heavily favored in this market. But this is not an official poll and does not have any role in calling an election.   

Senate Majority Leader

This market’s outcome will depend on who gains control of the Senate after the 2022 midterms. If Democrats retain control, then Chuck Schumer will remain Senate Majority Leader. If Republicans win, then Mitch McConnell will become Senate Major Leader.

While there are many other figures to put money on, Schumer and McConnell are the only serious contenders for this position. It would take a drastic career change for someone besides one of those two men to become Senate Majority Leader.    

Like the Senate Control market, PredictIt’s bettors favor the Republican to win. Also like the Senate, PredictIt’s bettors are less certain about the Senate outcome than the House outcome. But in the House and Senate races, PredictIt bettors are predicting a Republican sweep of both chambers of Congress.    

GOP Senate Seats

The GOP Senate seats market is the most unique among the ones listed here. The five markets above called for predictions about the likelihood of Democrat or Republican victories. The GOP senate seats market also calls for bettors to make a judgment about whether the Republicans will retake the Senate during the midterm elections. If the Republicans secure 51 seats or more — they don’t have a Vice President to break ties — then Republicans gain control of the Senate.

What makes this market unique is that bettors must make a precise prediction about how many Senate seats the Republicans could capture. Since Democrats have secured Senate control, Republican seats above 50 are almost certainly lost.

In February 2022, PredictIt’s market settled on the GOP Senate having 52-54 seats after the 2022 midterm elections. But that prediction has time to change dramatically as Senators’ campaigns unfold.      

PredictIt Market Analysis

While PredictIt offers races on state gubernatorial races, bettors interested in those markets will have to find them on PredictIt’s website. Governor races are more difficult to predict than congressional control.

As FiveThirtyEight points out, governors can overcome partisanship in a way that congressional candidates can’t. Republican Kansas’ governor is a Democrat. Democratic Vermont has a Republican governor. They enjoyed approval ratings of 54% and 79% respectively in mid-2021. Partisanship is still a strong predictor of a governor’s party. But there’s more nuance in a gubernatorial race than a congressional race.

Current Events in PredictIt’s Markets

While there is still uncertainty in the market, PredictIt users have settled on a Republican sweep of Congress. As of November 2, PredictIt users gave Republicans a 73% chance of retaking both chambers of Congress and only a 26% chance of Republicans only retaking the House.

Economic issues have risen to the top of voters’ priority lists. In a recent Gallup poll, abortion, crime, and gun policy were the next most important issues. This lineup of issues promises close elections throughout the country, which is also expected to be exploited by extremist groups emboldened by the January 6 attack on the Capitol.

While issues personal to voters motivate them to vote, the threat of increased political violence looms over the ballot counting. The election denial that fueled the January 6 riot has taken on a mythology of its own. In the days and weeks after the midterms, voters must be vigilant in reporting threats to election workers and rally around the winners of legitimate and safe elections.

What Changed 2022 Balance of Power Predictions

Major events like the 2022 State of the Union, Biden’s handling of Ukraine, and Ketanji Brown Jackson’s confirmation to the Supreme Court haven’t moved prediction markets. Neither did far-right representatives falsely accusing Democrats of pedophilia during Child Abuse Prevention Month.

Instead, the January 6 hearings and Roe v. Wade’s overturning moved prices in spurts over time. Donald Trump’s many lawsuits also seemed to be chipping away at Republican chances to control the Senate in 2023.

However, economic issues have caught up with the Democrats. Rising consumer prices and expensive loans have led PredictIt forecasts to favor a Republican takeover of the House and Senate.

This is also in keeping with historical trends. The party in the White House tends to lose congressional seats in the midterms. The voters who like the White House party the least and the ones who are unsatisfied with the incumbent party’s performance turn out in the midterms, too.

The Supreme Court Changed PredictIt Market Prices

A week of Supreme Court rulings delivered conservative victories on critical issues, including abortion, gun rights, and issues related to the separation of church and state. During that week, the price of a Republican House and Senate fell 16 cents, and a Republican House with a Democratic Senate rose 18 cents.

The shock of key conservative Supreme Court rulings has galvanized Democrats. Gas prices and inflation have fallen, countering President Biden’s approval rating. While the president’s party tends to lose congressional seats in the midterms, the Senate is close. The Republicans may only take the Senate by a couple of seats, but one is all they need.

Why Prices Changed Suddenly at the End of October

Conventional wisdom seems to be coming true in the 2022 midterms. The balance of power in Congress is likely to shift to Republicans after the midterms. The largest change came at the end of October when early voting began in many areas and PredictIt users had a clearer picture of the issues most important to voters. With the economy top of mind for many voters, the incumbent party is at a serious disadvantage at the polls.

This year, that party is the Democrats, who’ve had to manage a post-pandemic economy fraught with supply chain issues. Increased costs were exacerbated by Russia’s invasion of Ukraine, which disrupted oil and natural gas trade, increasing transportation and consumer costs further. Since the president and his party are given outsized credit for both good and bad economic conditions, it’s unsurprising to see backlash against the incumbent party.

How Offering 2022 Midterm Election Odds On PredictIt Is Legal

Click to sign up at PredictIt for a 100% deposit-match bonus up to $80 free

PredictIt is a prediction market run by Victoria University of Wellington, New Zealand. PredictIt’s goal is to see whether it can use market forces to make better predictions than professional polling. Faculty members don’t get paid extra for playing the market or analyzing the data. It’s set up to teach data analytics and related classes. So, its not-for-profit status is critical to its legality and limited offering in the United States. Visit PredictIt for up to $80 free on deposit.

Additionally, the Commodity Futures Trading Commission (CFTC) issued a no-action letter to PredictIt in 2014. The no-action letter says that the CFTC won’t penalize PredictIt for violating United States security laws. But PredictIt must follow certain conditions including:

• Capping individual traders’ wagers
• Capping the number of traders allowed in each market
• Maintaining PredictIt’s educational purpose

Users will notice that prices almost equal probability. However, there’s a small overround in most markets. Prices may add up to $1.01 or $1.02 instead of the perfect $1.00 users may expect from a prediction market.

That overround is a rough measure of two things: liquidity and uncertainty. There are enough traders to offer and accept prices that deviate from the market value. Traders have also settled on a clear market price. If the market was uncertain, that overround would be closer to five cents than a cent or two. So, traders shouldn’t be put off by those imperfect figures. They’re part of a healthy prediction market.

Bettors won’t get wealthy trading on PredictIt. But sports bettors who want to try their hand at prediction markets can view the PredictIt odds we’ve displayed here and decide whether to try the platform for themselves.

Strictly for educational purposes, of course.

How Election Betting Works   

Election betting odds are not professional polls, and they do not determine election outcomes. Rather, election odds are either set by oddsmakers or come from. But the odds are skewed by three important factors: desired profit, book liability, and bettor behavior.

Election betting odds react to the polls that call elections and to the bettors who themselves react to the results. Election odds do not determine election results.    

Desired Profit

At a for-profit sportsbook — not PredictIt — oddsmakers tweak the odds to make sure that the sportsbook comes out ahead regardless of the outcome. The math that makes that possible is the reason that the odds below add up to more than 100%. Oddsmakers will tweak odds to attract bettors to one side of the line.

This movement also causes variation among sportsbook odds. Sportsbooks balance the tradeoff between competitive odds and profit margins differently. So, oddsmakers take competitions into consideration when they price, too.

At peer-to-peer exchanges where bettors wager against each other, the exchange often takes a commission on winning wagers. So, it doesn’t have to be active in pricing like traditional sportsbooks do.   

Book Liability

A sportsbook’s liability is the amount of money it potentially has to pay out to bettors. If that liability is too high, a sportsbook risks a devastating loss. So, oddsmakers do their best to balance risk on both sides of the line. The goal is to minimize the risk of large upsets and losses.

Statistically, over enough time, unlikely upsets will happen. Sportsbooks don’t want to lose large sums of money on those days. So, they move the lines to avoid potentially crippling liabilities.

A peer-to-peer exchange doesn’t have this same problem. It’ll take a commission from each winning wager, so it doesn’t have to perform this balancing act like sportsbooks.

But peer-to-peer prediction markets end up heavily skewed by bettor behavior instead.     

Bettor Behavior

Many bettors are as emotional as any other citizen come election night. Passionate groups of bettors can distort market prices. In a peer-to-peer exchange, passionate bettors can overvalue losing candidates or wagers. At a for-profit sportsbook, oddsmakers will court the side of the line that will maintain sportsbook profitability.

Either way, irrational behavior can skew election odds far from the realities gleaned from exit polling. By the time election results begin to be called, the 2022 midterm election odds won’t represent reality anymore. Election betting markets are just as susceptible to passion and toxicity as the politics the odds are based on.       

Election Betting FAQs

Election betting is illegal in the United States. But PredictIt offers a small-dollar non-profit option for bettors who want to try putting money on the midterm elections. Here are a few common questions about election betting in the United States.