Blain’s Morning Porridge Oct 18th, 2024: US Election Online Odds – Distraction and Deflection?
“Democrats think everyone wo can vote should vote. Republicans think everyone who should voe, can vote.”
US polls show the election is too close to call. Suddenly we are being bombarded with “evidence” Trump is winning from online gambling site odds. Interesting, but nonsense. Polymarket’s users are not analogous with the electorate. Its also owned by Peter Theil – who maybe has a vested interest in Trump’s victory.
Is it time for a flutter on Kamala Harris to win the US election?
I think it must be. I’ve come to the conclusion the harder and more loudly true Trump supporters declare he is winning, the more they fear he is losing. This week I’ve been bombared with everything, including the kitchen sink, telling me Trump is winning. From evidence of 72 (actually I counted them 70) reasons why Trump isabetter, (most of which were opinions expressed as irrefutable facts), to Harris being embarrassed in an interview. The election noise is 99% bollchocks.
The polls, as used by the newspapers, media and prediction sites remain too close to call (Harris around 51%, Trump at 49%).
However, the online betting sites, like on-line crypto-platform Polymarket, are variously showing Trump as between 57-62% plus as a probability to win. That sounds like an arbitrage trade to me; buy Harris on Polymarket at 38%, and sell at 50% on… well where? The 358 prediction site is not a marketplace. Equally.. it would make sense to sell Trump at 70% online and buy him at 50% to win – if you could.
This week my Republican chums have been bombarding me with commentary all about the Polymarket odds, including many, many tweets from X. They show maps of the USA states as entirely RED – reflecting all the states Trump will win based on the Polymarket numbers. My Red voting pals say it’s going to be a landslide. Its getting lots of attention – and is being retweeted around and around and around.. That Trump will win because online gambling says he will in now another opinion dressed up as the truth.
The tweets, and the reinforcing emails I’m getting, all say the broadly the same things:
- Online gambling is the most accurate predictor of the election result because people are backing their vote with the cash. (Or are Trump’s campaign team pushing them because they conveniently show Trump winning?)
- Online gambling odds are showing the reaction of the electorate to the unfolding election events in real time.
- The “What Changed” question is critical to give Polymarket’s odds credibility. This week I’ve been sent comments explaining the sudden rise in Trump’s online share variously ascribed to Walz’s poor showing vs Vance in the VP debate, a 2.5% rise in Trump odds after Harris was seal-clubbed on her Fox TV interview, or that the 10% jump is due to absentee and early voting ballots coming in strongly in favour of Trump. (How would Polymarket gamblors know that when professional poll watchers don’t?)
The Trump campaign is pushing the Polymarket story as hard as it can. His managers want to build a solid narrative around online gambling as more reliable than polls, and to do that they want to back that with plausible sounding reasons why the numbers suddenly went from 50/50 to 60/40 – a “market-move” unparalled in its sudden scale in any previous election – when nothing around the fundamental choice around Harris or Trump has really changed.
Step back a moment and consider. Online Gambling is just a market – like any other. Markets are not smart or clever. They are, ahem, just voting machines reflecting the views of participants.
- If you think that participants in online gambling markets are exactly analogous to the whole US electorate, then fine, the numbers would suggest Trump is going to win by a landslide.
- What sample size does on-line gambling represent?
- How sensitive to manipulation a $1 bln market (Polymarket’s entire gambling revenues across all bets since inception) to whales placing $20 mm bets in favour of one candidate?
- If you think Polymarket is more likely the haunt of spotty, callow, nerdy youths between the ages of 18-35 who are attracted to the online betting because of its connections to crypto, because Elon Musk praises it, and they can’d get girlfriends, (because they made the mistake of telling the pretty girls they’re Trump supporters)… That means what you are watching on Polymarket is bias.
- Fact: most online gamblors are young men. Women are generally voting Harris and don’t want Trump.
Online betting is not respresentaive of the voting intentions of the nation. It is not a proxy for the actual vote.
Rumours this morning say the sudden spike on Polymarket – which saw odds on Trump dramatically tighen earlier this week to 72% likely to win the election at one point, I am told – is entirely due to some of Trumps’ new found billionaire hedge fund friends placing massive betts on Trump to win. No Sh*t Sherlock award for guessing some whales might be breaching the market.
That makes a kind of sense – after all, the Dark-Lords of Silicon Valley know online gambling odds are increasingly followed by the an important segment of the election-watching crowd – of course they do: they are the ones using their social media sites to push the narratives they want to show to these voters! Oh? Elon Musk isn’t using X to shill for Trump? My mistake…
Trumps Uber-wealthy supporters are pouring money and resources into Trump V.2 and they want to see substantial returns on their investment. They have zero interest in Republican agendas, but they have a vested interest in Trump’s success – he’s going to keep their taxes low, he’s going to deregulate crypto, and favour them with big roles and government influence. What? You think Musk is all in on Trump because he admires and loves him? Or because he sees Trump as another stepping stone on his road to becoming the first trillionaire?
Meanwhile, who is Polymarket’s most signicant investor?
Oh, Peter Theil…the same Palantir owning Dark-Tech-Lord who first employed and then funded Trump’s VP choice JD Vance’s hedge fund. Thiel led Polymarket’s Series B and largest funding round. Other Polymarket investors include Ethereum founder Vitalik Buterin. Nothing wrong with making smart VC investments – and Polymarket is now churning $ 1bln in betting volumes. Theil, his Founders Club investors, and Buterin will no doubt reap rewards from all the PR this is generating for Polymarket.
The Street seems increasingly convinced Trump will win, and is pilling into banks, crypto and Trump’s Truth Social – which is up 86% this month. Daniel Loeb, who runs Third Point is in the press saying he sees a “likelihood” Trump will win, and is making new investments in to assets that will benefit.
However.. is the sudden noise around online gambling honest or is it being played as election manipulation?
What we are seeing t’s a strategy straight out the Trump playbook. Say something once, say it again, say it again and again and again till it sticks. Say the gambling odds undeniably show Trump is winning. Trump is winning on Polymarket. Therefore Trump is winning.. Trump has won. Deny it at your peril.
It’s no different “The Election was Stolen” play. Say it and say it again and again and again. Mud sticks and maybe a few undecided voters will go with Polymarket and swing to Trump. If Trump looses in the actual poll I guarantee their will be manufactured fury from Trumpsville around the “irrefutable” truth that “reliable” gambling markets showed he’d won by a landslide.
If he wins by the few electoral college votes some mainstream prediction sites are now predicting, then I also guarantee he’ll be complaining his mandate is much bigger. “the biggest ever, the biggest in history”, because “votes” were stollen, seeking to justify his recent totalitarian threats about arresting political rivals and disloyal ‘Mericans.
For the record:
This morning on-line gambling sites currently show:
Polymarket Trump 60%
Betfair Trump 58%
Kalshi Trump 57%
PredictIt Trump 54%
The polls are very different:
Nate Silver Trump 50.2%
538 Harris 53%
Real Clear Harris 49.2%
Newpapers 50/50
I am currently reading Nate Silver’s new book – On the Edge. It’s interesting. He is famous for 538, the opinion poll analysis site named for the number of electors in the Presidential election college. He sold the business, but is out with his own predictions.
Out of time, and have a great weekend.
Bill Blain
Author of the Morning Porridge, founder of Wind Shift Capital
4 Comments
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Just more ‘evidence’ Bill of the deep state
Jason
There is no such thing as a deep state.
To be brutally frank – the state could barely claw its way out of wet paper bag without first assessing, testing and appointing committees to do so.
What is much more likely is a cabal of motivated very wealthy libertarians with the agenda of maintaining and increasing that wealth, by using their wealth to maninpulate the economy, through politics, to achieve outcomes that benefit them. Or they may be smart clever tech entreprenuers who see their success accelerated if they can just get rid of pesky government interfernce, like regulations on crypto and social media.
The key here is knowing which enemies are real and which are entirely ficticous.
I was of course being sarcastic and facetious ! Completely agree- listen to the coming storm on iplayer. Really good
Coming storm – very interesting.