Friday, October 22, 2004

Election real-money wagering central.

"All voting is a sort of gaming, and betting naturally accompanies it."
-- Henry David Thoreau, 1848.

If you want to wager real money on the election, your "bookie central" is at the excellent RealClear Politics web site. There's data and odds from, and links to, Iowa Electronic Markets, Tradesports in Ireland, and a host of wagering shops in the UK. Get your credit card out and click to bet where you like the odds best.

Curiously, as the US polls tighten up to put Bush and Kerry in an apparent dead heat, in the real-money markets support for Bush has been firming up. At this moment at Tradesports Bush is costing 61 for a payoff of 100, up from 53 a couple days ago. Are the people wagering real money watching something that the chattering pundits following the polls are missing?

It came as a surprise to me that today's organized real-money election wagering in the US isn't so much a recent innovation as a revival of old-time practice. From after the US Civil War until 1940 organized election markets on Wall Street handled millions of dollars and betting odds on candidates were published in the daily newspapers.

Here's an article on the subject drawing from a new academic paper (.pdf) covering the history of these markets, their economic efficiency and record of predicting election outcomes.

Hey, I try to imagine the elections of tomorrow if today's election markets grow and globalize like others have: Are you an American who faces the cost of a tax hike or a Social Security benefits cutback if the wrong candidate wins? Or a foreigner who faces the cost of a tariff -- or maybe a war? Well, just call up your broker and lay off the risk in the market...

Update: Perhaps Bush's rise in the betting markets has something to do with those who are minding real money noting a trend line commented upon by the astute Michael Barone (author of the excellent Almanac of American Politics) that I haven't seen mentioned anywhere else in the mainstream media.