Prior to the initial debate, Donald Trump was a -110 favorite to win the Presidency. After the debate, Trump moved from -110 to +120. Things held steady until the VP debate. Within the week after the VP debate, one in which the consensus said Vance won, Trump got back into the lead at -115.
Since that move up, the momentum in the betting markets has been all Trump. Trump reached a high of -200 in the betting markets on October 30th. In the past four days, Trump has taken a sharp turn down and is currently -130 to -140. Trump is still in the lead, but a 60 to 65 cent drop in odds is big in just 2-3 days. What happened?
After the VP debate, slowly on Real Clear Politics’ “Top Battleground Polls”, (https://www.realclearpolling.com/elections/president/2024/battleground-states) Trump began to take over…getting to the point where the RCP aggregate showed Trump in the lead for every battleground state. However, over the past week, Wisconsin and Michigan moved back in the Harris column on the RCP Battleground polling. Along with that move, there’s been news that an Iowa poll showed Harris in the lead which would be a shocking loss for Trump. It is however just one poll…but it contributes to market adjustments…and pricing concerns on Trump for bettors.
Still the momentum has shifted from Trump to Harris based on this data…note I said “momentum” and not that the “lead” has shifted.
As a bettor, I felt Trump’s odds had gotten out of hand based on the market data and polling. When Trump was -200, that translated into Trump having implied odds of 66.67% of winning the election. I do not disagree that the data does lean to Trump winning, but a 67% chance of winning is a little high based on the data. To warrant such a probability you would want the polling to show Trump with at least a 3-4% national poll lead, and his lead is around +0.2 nationally and +1 in the battlegrounds according to RCP…very tight margins and not indicative of a 67% chance of winning.
You can complain that Real Clear Politics (RCP) doesn’t do data right, or that polls are wrong, but these data points still dictate the betting market pricing to a decent extent…flawed or not. If you feel the polls/RCP data is flawed, then that means you see errors in the betting market calculus and you should bet!
When I saw this price disparity (Trump having 67% chance of winning despite only small leads in the polls) I fully expected once books moved their limits to $50,000 and $100,000+ that groups/bettors would drop some big money on Harris. Eventually that action hit as books took heavy Harris action and quickly tightened up the market in the last two days. When the books adjusted based on this flow of action, Trump dropped to -130 and settled there…which implies a 56.52% implied probability of winning…far closer to what the actual data suggests in polling and especially the key battleground polling.
Pennsylvania is key…and the data in PA shows us a deeper look at why this market moved. Trump was -130 to -150 to win PA up to the past week, and most of those betting markets have dropped Trump’s PA odds to a coin toss at -110 for Trump to win PA, but -120 for Harris to win PA. So yes, these markets show PA being a very close race where Trump is behind by a very tiny margin. If Trump loses PA, and Harris wins Michigan and Wisconsin based on the recent poll shift…it’s game over for Trump. He needs PA if he is losing MI and WI. The Electoral College with PA going to Harris and all other polling correct would have Trump losing 268-270…tight! If Trump gets PA, and even if Harris holds MI and WI…he likely wins barring some shocks somewhere else. If Trump loses PA, he needs to win either Michigan or Wisconsin. Trump’s Michigan odds are +180, his Wisconsin odds are +110. If he wins Wisky, but loses PA, he wins. Odds would say his best odds of winning the US Presidency would be to take PA.
Which makes me think, betting Trump to win PA at -110 might be better than Trump to win the election at -130 to -140 based on the idea that if Trump doesn’t win PA, he is up against it to win the US Election. I think the big value on Harris is now gone as recent money has pushed this market to where it should be. Trump -200, regardless of your individual politics or whether Trump actually wins or not, was too high a price to pay based on any of the data.
I will continue to update on these markets with any new info until they close for betting. Side note, betting volume in 2020 on the US election was double what it was in 2016…and in 2024…betting market volume is already 138% higher than what it was in 2020…and I think there is A TON of money still waiting to come into this market for both Trump and Harris.
Good luck!