Betting on the Presidential Election

BySascha Segan

Oct. 31, 2000 -- The election’s still a toss-up in the United States, but British gamblers say George W. Bush is going to win the White House.

“Most of the money over the last three or four weeks has been for Bush,” said Matt Finnigan, spokesman for Ladbroke’s, the U.K.’s largest betting house.

It’s illegal to bet on political races in the United States. But overseas, almost anything goes. William Hill, Britain’s second-largest betting house, has already received more than 200,000 pounds ($290,000) in bets on the presidential race, spokeswoman Serena Momberg said.

In England, Ireland, and Australia, bookies all say Gore started strong at the beginning of the campaign, but has drifted off to become the underdog.

The bookmakers better have the odds right — or they’ll get burned in payoffs at the end.

The combination of market forces and financial incentive has led to startlingly accurate advance election results from bookmakers. “For the general election of 1992 in the U.K., everyone said that Labour, led by Neil Kinnock, would win.” Ladbroke's spokesman Ed Nicholson said earlier this year. “We were the only poll that said differently. We said that the Conservatives would get in” — and they did, even though they were 10 points behind in ordinary opinion polls.

Cash Down on Bush

The two big English betting houses have seen most money following the low odds to Bush.

But at O’Halloran’s bookmakers in County Cork, Ireland, the bookies and the “punters” — British Isles slang for gamblers — don't see quite eye to eye. Most of the bets have been placed on Gore, but manager Gary O’Halloran said he’s put the odds on Bush.

“Big bets, small bets, it didn't matter, they were all going for Al Gore and for the Democrats ... at this stage, we’re hoping that Bush does the business,” O’Halloran said.

O’Halloran’s is also handicapping the New York Senate race — Hillary Clinton is heavily favored at 1:3 odds over Rick Lazio at 2:1. They're even taking bets on whether Gore and Bill Clinton will campaign together — most people are betting no at 2:5 odds, with longer 13:8 bets on a replay of Bill and Al’s Excellent Adventure.

Corn-Fed Futures

Laws haven’t stopped American gamblers. All of the foreign bookies ABCNEWS spoke to said they’ve received bets from the U.S.

“It’s quite obvious the Americans like to have a flutter on politics,” O’Halloran said.

On our side of the pond, the Iowa Electronic Market provides a legal alternative. Run by the University of Iowa’s business school, it’s a mock futures market where people bid with real money. Thousands of traders participate in seven political markets, and you can bid over the Web. In 1992 and 1996, the market came within two-tenths of a point of predicting the voting breakdown for president.

“When a pollster asks you a question, ‘Who you going to vote for?’ you can tell them the truth if you want, or you can tell them something else. In the market, our traders have a financial gain or loss associated with the way they decide to trade, so it’s like they’re putting their money where their mouths are,” said Joyce Berg, Iowa Electronic Markets director.

Right now, Iowa has George Bush by a landslide: he’s at $0.620 against Gore’s $0.365 — meaning the payoff for a Gore win would be a little less than double that if Bush wins. In the market for control of Congress, bets on the GOP controlling both houses are running a little ahead of the odds of the House going Democratic. Hillary Clinton is heavily favored to win the New York Senate seat.

The Iowa prices change continually with market forces. Bookmakers tweak odds based on bets but also on the public mood, which can be difficult to discern from abroad.

“It’s a little more difficult doing this at long range,” said Graham Sharpe, spokesman for William Hill. “But we make it our business to keep an ear open as to what’s going on ... we’ve been betting on the U.S. elections for 20 years.”

Betting via Concorde

Most bets are pretty small, but Momberg said she's seen $15,000 placed on Al Gore this year. And sometimes, Sharpe said, bettors go a little wild.

“In 1992, we took one of the biggest bet’s we’ve seen from a lady in Washington: $25,000 on Clinton at 7:4 odds ... and a couple of elections back, I had a guy who flew over on Concorde to place a bet on Pat Buchanan,” he said.

With a tight spread of odds, though, none of the betting houses are expecting to lose a lot of money on this year’s election.

“The biggest harm we’re likely to come to is should either Tiger Woods or Will Smith eventually become president,” Sharpe said. Woods is 1,000:1 to become president at any point in his lifetime, and Smith is 500:1.

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