As Joe Biden surges in the polls thanks to a season of political failures from President Trump, betting markets are considering, for now, the former vice-president as a solid front-runner in November. The major American market, Predictit, now prefers Biden by a 21-point margin, with the Democratic candidate favored 61 percent to Trump’s 40 percent. For those who prefer less erratic investment opportunities, that means that if a bettor pays up 61 cents today and Biden wins the election, they will be paid out $1 on November 3.
According to current polling, Biden is hardly a gamble at the moment: RealClearPolitics polling averages show the former veep with a 10.1 percent lead and 51 percent of the expected vote, while the FiveThirtyEight average shows Biden with a 9.7 percent lead, but also at 51 percent. The only other candidates to push north of 50 percent at this point in an election year were Richard Nixon in 1972 and Ronald Reagan in 1984, who enjoyed massive wins in November by 23 and 18 points, respectively. In this electorally blessed company, bettors have responded promptly in Biden’s favor: Since May 30, when he first overtook Trump on the market, the former veep (in light blue) has steadily increased his lead over the president (in purple).
While betting markets usually carry some measure of crowd wisdom, they have been especially active in a pandemic that has shut down more traditional avenues of gambling, like casinos and sports. In early June, spokespeople for Predictit and Smarkets — a U.K. market that now also favors Biden — confirmed to CNBC that “trading volume has risen to levels unseen since March, when the U.S. began shutting down major portions of its economy to halt the spread of the coronavirus.”
While betting markets can account for major factors — like the Electoral College — in a way that polls do not, there is some evidence that they tend to reify themselves. They are also notoriously hot to the touch, changing rapidly as new information comes into public light. And they’re also prone to allow far-flung bets deep into the process: On Thursday, Hillary Clinton was a two-cent bet for a 2020 win.