Political betting markets

Political betting markets are markets where individuals wager on elections.

Arguments on why political betting markets are better than political polls

• US midterms: why gambling markets often predict elections more accurately than polls, TheConversation.com, 2022
• Political betting: Is it a 'gambling den' or 'better than polls'?, Politico, 2022
• Betting on Elections Can Tell Us a Lot. Why Is It Mostly Illegal?, The New Yorker, 2022
• The Election Betting Markets Fell Short. They're Still the Most Flexible Predictor., Reason.com, 2022
• Prediction markets vs polls – an examination of accuracy for the 2008 and 2012 elections, Journal of Prediction Markets, Jan 8, 2015, DOI: https://doi.org/10.5750/jpm.v8i3.981

The history of political betting markets:

• The Long History of Political Betting Markets: An International Perspective, Oxford Academic
• Historical Presidential Betting Markets, American Economic Association (JOURNAL OF ECONOMIC PERSPECTIVES, VOL. 18, NO. 2, SPRING 2004, (pp. 127-141).

Journal articles on the reliability of political betting markets

• Are markets more accurate than polls? The surprising informational value of “just asking”, Judgment and Decision Making, 2019. Journal volume & issue Vol. 14, no. 2. pp. 135 – 147

Track record of the website ElectionBettingOdds.com in terms of accuracy

The website ElectionBettingOdds.com averages live odds that it pulls from FTX.com, Betfair.com, PredictIt.org, Smarkets.com, and Polymarket.com. The odds are then volume-weighted, meaning that the odds for each market are multiplied by that market's share of quarterly volume.

• ElectionBettingOdds.com FAQ

How accurate is the website ElectionBettingOdds.com?

The website ElectionBettingOdds.com has a respectable track record in terms of accuracy as can be seen at: Track Record - Election Betting Odds, 2022

Screen shot from the website ElectionBettingOdds.com.[1] The website is run by Maxim Lott and John Stossel.

Arguments on why political betting markets fail to reflect the basic principle of one person, one vote

In political betting markets, one person, for example George Soros, can place a $10 million bet on a candidate, heavily moving the "odds" in that candidate's favor and distorting public opinion through fake news. Whereas an average voter, in most instances, is limited by whatever the minimum wager may be.

2019: Judgement and Decision Making Journal: Another approach

According to the abstract for the 2019 journal article Are markets more accurate than polls? The surprising informational value of “just asking” published in the Judgment and Decision Making journal:

“

Psychologists typically measure beliefs and preferences using self-reports, whereas economists are much more likely to infer them from behavior. Prediction markets appear to be a victory for the economic approach, having yielded more accurate probability estimates than opinion polls or experts for a wide variety of events, all without ever asking for self-reported beliefs. We conduct the most direct comparison to date of prediction markets to simple self-reports using a within-subject design. Our participants traded on the likelihood of geopolitical events. Each time they placed a trade, they first had to report their belief that the event would occur on a 0–100 scale. When previously validated aggregation algorithms were applied to self-reported beliefs, they were at least as accurate as prediction-market prices in predicting a wide range of geopolitical events. Furthermore, the combination of approaches was significantly more accurate than prediction-market prices alone, indicating that self-reports contained information that the market did not efficiently aggregate. Combining measurement techniques across behavioral and social sciences may have greater benefits than previously thought."

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For the full Journal article, please see: Are markets more accurate than polls? The surprising informational value of “just asking” Judgment and Decision Making, Vol. 14, No. 2, March 2019, pp. 135-147