Admin October 17, 2024
Topline
Betting markets moved further Thursday toward predicting a former President Donald Trump win, the latest evidence of money flowing into bets supporting another Trump presidency, though polling data point to a far more even split between Trump and Vice President Kamala Harris less than three weeks before Election Day.
Donald Trump appears at an Atlanta campaign event Tuesday.
Key Facts
The blockchain-based election betting site Polymarket priced in a 60% chance of a Trump victory, breaking the 60% threshold for the first time since late July, days after President Joe Biden bowed out of the race.
Other prominent sites which allow users to wager money on the outcome of the election have similar shifts toward Trump: Betfair places a roughly 58% chance at a Trump win, Kalshi 57%, PredictIt 54% and Smarkets 58%.
Election Betting Odds, which aggregates implied betting odds across the five major markets, gives Trump a 57% chance at victory, tilting in Trump’s favor by the widest margin since July 29, up from about 48% at the end of September.
Contra
Roughly 60% betting odds does not equate to a 60% to 40% lead for Trump in polls, but rather indicates election bettors expect Trump to win about 60 out of 100 election simulations (think how underdog sports teams often win games despite sportsbook lines). And poll-based election models are almost exactly split: Statistician Nate Silver’s model gives Trump a 50.2% chance of winning next month compared to 49.5% for Harris, while FiveThirtyEight assigns Harris a 53% to 46% edge. National polls lean in Harris’ favor, with Real Clear Polling’s latest weighted data giving Harris a 49.2% to 47.7% advantage. There’s also the issue of what is driving the dramatic shift in betting odds despite mixed survey data, and Silver, who advises Polymarket, wrote last week it’s possible a Trump-leaning demographic on the sites may skew the data to reflect stronger Trump odds than justified by the data. Polls strive to survey smaller groups representative of the broader U.S. voter population across race, age and other demographics.
Tangent
The nascent election betting market landscape is not the only financial instrument moving toward a Trump victory. Shares in Trump Media and Technology Group, the Truth Social’s parent company primarily owned by Trump, are up 86% in October, with the low-revenue social media company’s stock movement often viewed as a proxy for Trump’s election odds. And “you can see” evidence in the broader stock market that investors are “very convinced Trump is going to win,” billionaire hedge fund manager Stanley Druckenmiller told Bloomberg Thursday. Druckenmiller pointed to the outperformance of bank stocks and cryptocurrencies, which Trump has promised to deregulate, as evidence; the S&P 500’s financial sector is up 7% over the last month, the top-performing of the S&P’s 13 sectors, while bitcoin is up 15% over the last month, hitting its highest level since August this week. Fellow hedge fund billionaire Daniel Loeb reportedly wrote to clients he’s positioning assets in his Third Point fund to reflect the “increased…likelihood” of a Trump win, noting Third Point is making investments in assets which “could benefit from such a scenario,” according to Reuters. Rich Handler, the chief executive of Jefferies investment bank, wrote on social media Loeb’s assessment was “smart.”
