I’m a gambling man, so when I want a forecast on who’s going to win the presidential election, I don’t look at the polls.
I look at the odds.
That’s where the real opinions are, says Leighton Vaughan Williams, a professor of economics and finance at Nottingham Business School and director of the school’s Betting Research Unit and Political Forecasting Unit. Vaughan Williams told NBC News that
betting websites offer a far more accurate prediction of electoral outcomes than opinion polls because the average voter doesn’t have any incentive to tell a pollster the truth about their voting habits, but when they are betting their own money they will tend to think hard about the choices they make using the best information available to them. The more money involved, the more efficient and accurate the market, he said.
“This is people’s real money,” Vaughan Williams said. “People who know the most bet the most, but people who know only a little tend to bet only a little. So with this very liquid market you can be pretty confident that the market is giving you an accurate insight into what is going on.”
That should be encouraging for Democrats. In this final week, the money is pouring down on Barack Obama. On Youwager.eu, a Costa Rican wagering site where I bet on football and baseball games, Obama’s money line was -180 at the beginning of this week. That means a gambler would have had to bet $180 to win $100. This morning, it’s -290, a 62 improvement in his odds. Bookmakers set their lines to attract an equal amount of money on each proposition, so this indicates a strong shift in Obama’s direction.
William Hill, the well-established British bookmaker, has had Obama at 1-2 for most of the campaign. But yesterday, he was 1-3, and this morning, 1-4. The odds keep dropping. That’s good for Obama, but bad for Obama bettors, because they’ll win less money.
At InTrade, Obama is at 68.1 percent, after being as low as the mid-50s in early October.
What gives these odds even more credence is that almost all the money comes from foreigners, who have no partisan motivations to favor a particular candidate. The Unlawful Internet Gambling Enforcement Act of 2006, signed into law by President George W. Bush, made online wagering on sports and politics illegal in the United States, and discouraged many foreign sites from accepting American money.
However, there’s now a free iPhone app called SideBets that allows you to get around that law by wagering with your friends. SideBets uses odds aggregated from numerous betting sites. On Tuesday, it had Obama at -200. Today, he’s -280.