Saturday, October 17, 2015
Interesting: GOP Betting Markets Beg to Differ With Polls
As Naked Dollar readers know, I am a big fan of prediction markets. These are markets where people bet real money on political outcomes. I like them because they tend to be more accurate than polls. People don't always tell pollsters the truth, but they damn well don't bet money on things they don't think will pay off.
Right now, the prediction markets are taking quite a different view than the polls on the GOP race:
RCP Polling Avg. Nomination Probability
Trump 23% 12%
Carson 20% 6%
Rubio 10% 23%
Bush 8% 15%
Fiorina 8% 6%
Cruz 8% 10%
Huckabee 3% 3%
Paul 3% 4%
Kasich 3% 6%
The market is saying that it's not a buyer of the outsider thesis, at least not yet. Trump and Carson are both trading way below where their poll numbers suggest they should be. Carson, in particular, is getting no love from the market, and this despite the fact he raised an astonishing $20 million last quarter.
On the more establishment side, Rubio, Bush, and Kasich all trade higher than their poll numbers would suggest. Rubio is, in fact, the market favorite right now. Kasich, who is barely registering in the polls, has the same odds of winning as Carson. Wow.
One other fact to ponder: the Iowa Caucus is fourteen weeks away, and no one is at more than 23% to win the nomination. Has there ever been a more wide open race this late?
(Technical note: the prediction market data come from Predicit.org. Since the probabilities for all the candidates adds up to much greater than 100% - a market inefficiency - I reduced them all proportionately. I also didn't show a number of candidates that don't have a pulse.)