The long-awaited selection of former Vice President Joe Biden’s 2020 running mate was handed down Tuesday afternoon. It was California Sen. Kamala Harris, long the betting favorite for veep nominee. Former National Security Advisor Susan Rice briefly overtook her in the betting odds, but Harris prevailed.
Biden’s odds to win the November election barely moved on the announcement, increasing 1-2% in his favor on PredictIt. As of Wednesday morning, Biden was a 59c favorite. FiveThirtyEight pegs his chances at 71%, according to a new analysis released Wednesday. He’s a clear favorite but anything can change.
There’s value on Biden at that price, but there’s also risk in your money being tied up indefinitely in the case of a contested result. It’s widely feared President Donald Trump will contest a close election.
The Harris selection’s lack of an impact on the presidential election market is unsurprising considering that polling found Biden would be in about the same position regardless of whom he picked from among his shortlist of female running mates. In other words, the election is a referendum on the Trump Administration and, arguably, very little else. Still, some gamblers reacted in markets related to Biden’s veep selection.
Harris to be elected president?
Biden is a staggering 14% on PredictIt to drop out before Nov. 1, odds that saw a small and brief bump after the Harris announcement. Apparently some gamblers thought that having Harris on the ticket, as a former contender to secure the party’s nomination for president, boosted the remote chance that Biden would bow out.
By conventional standards, she was one of the most qualified picks on Biden’s shortlist.
Of course, Biden would have to be physically incapacitated or die in order to drop out. Biden is the oldest nominee in history and some say he, like Trump, is showing signs of cognitive decline, but the VPOTUS has always been a “heartbeat away from the presidency” — there’s really nothing special about Harris in this betting context. In other words, Harris vs. anyone else is negligible for the Biden-dropping-out market.
For comparison, the market has Trump at 10% to drop out by Nov. 1.
The favorite-longshot bias is also alive and well with regards to Harris being elected POTUS (not VPOTUS). In case you’re unfamiliar with what that bias means: In gambling, it is often observed that bettors overvalue longshots and undervalue favorites. Everybody loves a massive ROI and the bragging rights that come along with correctly backing the massive underdog outcome. Sports betting parlays are popular for a reason.
While the Biden vs. Trump odds were basically unchanged, Harris tripled in value to win the presidential election herself. That would require Biden dropping out and her being elevated to the party nominee for president. Harris was traded at 2c prior to the announcement that she’d be joining the ticket. She was at 5-6% as of Wednesday morning. While the prospect is not impossible given Biden’s age and an ongoing pandemic that makes people in his age bracket especially vulnerable if stricken with the virus, 20/1 odds are astonishing.
About 150,000 shares were traded on Harris to win the presidency around the time of the announcement.
As of Wednesday, about a week before the Democratic convention, Harris was only 98% to be the veep nominee. Might there still be gamblers out there thinking that Biden could drop out between now and next week or, in some crazy universe, that he rescinds the Harris selection? Perhaps, but it’s likely more due to liquidity issues than an actual handicapping of the chances of Harris not being the veep nominee.
Not really. People are anxious to cash out to play other markets. If you are satisfied making a 2% return within a few weeks, there are almost always opportunities like this to take money from liquidity constrained traders anxious to move to the next market.
— ArmenianBacon (@ArmenianBacon) August 12, 2020
Vice President Mike Pence to drop off ticket?
The market for whether or not Pence will be the 2020 Republican nominee for vice president also had some relatively large swings after Harris joined the Biden ticket. It’s long been speculated by pundits that Trump could dump Pence for ex-South Carolina Gov. Nikki Haley, under the notion that she’d inject energy into his campaign and help him with women. Folks have also argued it would allow Trump to upstage Biden’s pick.
Many people on social media reacted to the Harris pick with speculation that she’d win convincingly in head-to-head debates against the former Indiana governor. He dropped from 92% to be the GOP nominee for vice president down to 87% before the market corrected. Pence was back at 92% early Wednesday.
It appears that the immediate reaction to Harris from Trump and Pence gave the betting public no more reason to believe that Pence is more likely to leave the ticket now than pre-Harris.
The GOP convention is later this month, so the window for the Pence market is closing fast.
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