Betting on Romney's VP: Who Is Your Money On?

Aug. 7, 2012 -- It could happen any day now. With Ann Romney heading home from the Olympics as early as this week and the GOP convention less than three weeks away, likely GOP presidential nominee Mitt Romney's running mate announcement could come at any time.

And while politicos pontificate about which politician will make the ticket, betters from Los Angeles to London are wagering their loot on Ohio Sen. Rob Portman or former Minnesota Gov. Tim Pawlenty, both of whom are ranked in ABC Veepstakes expert Jon Karl's top tier of possible running mates.

Traders on the Ireland-based Intrade political betting market have placed $17.8 million worth of bets on whom Romney will pick. But of the 58 possible picks being traded on the market, Portman and Pawlenty are the only two Veepstakes short-listers who have even hit double-digits.

Portman hovered around a 5 percent chance until April, then as his appearances with Romney increased, so too did his Intrade odds. The Ohio senator's peak value of 39 percent came on July 11, the day after he met with chief Romney advisers. Traders are now giving Portman a 30 percent chance of scoring the VP spot.

Pawlenty, who waged a short-lived bid for the GOP nomination last year, has seen his odds drop over the past week by about 3 percentage points. The former Minnesota governor now sits at 22 percent.

While the odds of a Portman or Pawlenty pick are more than 11 percentage points more likely than the next contender, the odds are still larger that Romney's choice won't be one of them than the odds that Romney will choose one of the two.

"They are hardly overwhelming favorites," said Koleman Strumpf, a professor of business economics at the University of Kansas School of Business. "Look at each one in isolation and there's only a 30 percent chance that, say, Portman is picked so if someone else is picked wouldn't be much of a surprise."

Florida Sen. Marco Rubio, a Tea Party favorite once thought to be at the top Romney's list, sits in third place at a mere 9.9 percent chance of being chosen on the Intrade market, which caters to betters within the U.S. A similar market BetFair, which is based out of London and does not accept bets from America, also has Rubio in third behind Portman and Pawlenty.

This time last year Rubio was the easy favorite for the GOP's vice presidential spot, with betters giving him a 36 percent chance of being chosen. In June of 2011, more than 7,000 people were placing their bets on Rubio. That number has plummeted to about 200 daily betters.

All together, more than 1.8 million bets have been made on Romney's choice of running mate.

While the latest polls show Chris Christie, the firebrand governor of New Jersey, has the highest favorability rating – 42 percent according to a July 1 CNN/ORC poll - of all the VP contenders, Intrade betters think he has a mere 2 percent chance of being chosen. Christie is in the bottom "unlikely" tier of Karl's ratings as well.

Strumpf said that in closed-door decisions like this, where little information is available on Romney's eventual pick, it is expected that no one contender will have very good odds in the betting markets.

"The markets know that the markets just don't know a lot," Strumpf said.

During the Supreme Court's Health Care deliberations, the Intrade market overwhelmingly thought the court would strike down the law's centerpiece, the individual mandate requiring most Americans to buy health insurance. In the week before the court's ruling, betters gave the mandate a 76 percent chance of being ruled unconstitutional.

But the betters were wrong. The court upheld the mandate in a close 5-4 ruling.

During the past presidential election, Intrade betters were way off on their Republican vice presidential pick as well. The day before GOP nominee John McCain named Alaska Gov. Sarah Palin as his running mate, Palin was trading at 1 percent on Intrade.

Intrade spokesman Carl Wolfenden said betting on running mates was not nearly as popular in 2008 as it has been in 2012.

"A lot of the reason why the vice presidential market is so popular this time around is there is kind of nothing else going on at the moment," Wolfenden said. "Last time we had two nominating battles that kept people busy, especially the Democratic one which went down to the wire."

But while betting markets like Intrade and BetFair have been pretty accurate in predicting election outcomes, Mike Smithson, a former BBC journalist and founder of PoliticalBetting.com said he does not think they are "in any way predictive" of whom Romney will choose as a running mate.

"This is down to the judgment of one man," Smithson said. "Where people themselves are involved in elections then you get a much greater say but where it's down to one individual decision, who knows how Mitt Romney's mind works."