Post: #1

I was asked on the Donald Trump thread to provide a data sheet on political betting, which I'm happy to do, since I find the subject very interesting. Here's the first (more general) part, the second (on the actual process of betting) will come in an hour or so:

Political betting vs polls & political experts
Having a look at the political betting market can be interesting even if you don’t plan on risking any money because of the delta that the betting markets often show to the polls and the opinions of political experts. For example, here are two potentially misleading factors that betting markets are more immune to than experts and polls:

Social desirability
When somebody is asked questions by a pollster, maybe on the street or on the phone, there’s a certain probability that there will be an acquaintance in the vicinity. For the average guy, when his girlfriend is near him, it does make sense to answer the question of who should be the next president with „Hillary – it’s time for a woman to be president!“
When that same guy has to bet his own money or cast his own vote though, meaning when it actually counts and nobody else will know, that’s when he might just go for another candidate.

The bubble
How often do we talk about the media’s leftist and politically correct bias? I don't want to offend anyone, but it can be that forums like RVF are just as much of a bubble as an SJW's news feed, just with a different slant.
On betting markets however, the people who actually put something at risk are much more motivated to look at a question like „who will be the next president“ from all kinds of different perspectives and integrate many more different bits of information into their opinion than what is necessary in a comment section.

It is psychological factors like these two why statisticians regularly come to the conclusion that political betting markets are closer to the end results than polls or the opinions of political experts. For example british professor Leighton Williams on the last presidential election:

Quote:the balance of opinion among so-called political experts was pretty evenly divided between those thinking, like Fox News pundits Dick Morris and Michael Barone, that Romney would win by a landslide, and statistical analysts like Nate Silver, of FiveThirtyEight, Sam Wang of the Princeton Election Consortium and Drew Linzer of Votamatic, who believed the opposite.
Meanwhile, a glance at the betting/prediction markets showed what they had always shown — that the president would be re-elected by a handsome margin, and that nothing that Mr. Romney or his team could do was likely to prevent that happening.

Snapshot vs Forecast
It’s also important to understand that the questions that pollsters ask invite the interviewed people to provide a snapshot of their current opinion, for example: „If the election were held tomorrow, who would you vote for?“. Even if the interviewer doesn’t frame the question in this way, the interviewed people understand the question in this way. They will answer what they currently think.
But the election will not be held tomorrow – the U.S. presidential election will be held on November 8th, 2016 – 14 months to go. People betting on the betting market will take that into account, people answering a phone call will not.
For example, in spite of Angela Merkel’s very extreme decision to grant unlimited asylum, just last wednesday a poll came out that shows her in the lead with her party getting 41 percent of the (virtual) vote
My guess is that a result like this comes because of the time delay between her decision on the refugee/immigration decision and the results of that decision. Let one year pass, and as the true cost of her decision will become a little more clear to the voters, I'm sure her approval ratings will drop – political bets are highly motivated to take these future developments into account and provide an actual forecast leading up to the point oft he next election – people who are polled will just give their current opinion.

There are many more aspects to it, but I think this should already be enough to at least take a look at the political betting market and why they may see the odds a little differently.

Post: #2

My betting strategy
I'm not really that much of a punter, I place maybe two bets a year. I sometimes read blogs that deal with political betting because they offer interesting and more neutral perspectives, but that's all. So I can really only give you my line of thinking, which I'm sure is far from being complete.

This is my current betting slip on the U.S. Presidential Election:


The two main columns of my strategy are:

Play both sides of the market
Under "Matched bets" you will notice that I bet for ("BACK", the bets shown in blue) as well as against ("LAY", the bets shown in red) Hillary Clinton.
This is one of the main differences between betting on a market and betting against a friend: Most punters play both ends of the market. Online betting is no "question of honour" where you "stand by your opinion" - this is done anonymously, and it's about probabilities, and how these probabilites shift over time.

I would never bet against Hillary, because of course there is a good chance that she will be elected president in 2016, no matter whether you want that or not, and I don't intend to lose any money. My bet against her at 2.32 (representing a "1 in 2.32" = 43% chance that she will become president) was only because I really think that 43% is too high a probability. I'm currently thinking that her chances (this market is only about her chances, not the chances of the whole democratic party) are more like 1 in 3, and that the market will gradually correct itself and move into this direction.
So I bet on her while fully intending not to hold onto this bet, but to go from betting against Hillary to backing her once the market shifts to a more realistic view of her chances and it is possible to bet on her for 3 (which by the way means that my wager will be doubled, not tripled - when backing, you have to subtract one to find out what you actually will win - the 1 only represents you getting your wager back).
About a week after I placed my bet AGAINST Hillary at 2.32, the market already moved into the direction of giving her presidency a lower probability of 1/2.48 = 40% - so I hedged my bet by betting 200 Euros ON Hillary at these odds.


Decide your own timeframe
Concerning my main interest Donald Trump, I would love for him to become the next president, and I think he would be great, but... it is 14 months to go and he has powerful forces against him - so much can happen until then. For example:

• health risks - he will turn 70 next year, and for any human it's only a question of time until one gets cancer or another debilitating disease
• the RNC / RINOs finding a way to screw him over and not give him the nomation
• mexican cartels assassinating him - there's already a bounty on his head and he DOES pose a certain risk to the way that middle american drug cartels and gangs operate in the US
  

While none of these events might be very probable, you will be able to think of a dozen more low-probability events that can happen in over a year, and these chances add up. And then there's the big achilles heel that the Trump campaign has:

If he doesn't soften his stance on the establishment, lobbyists and the general way that politics has been done for the past decades (with "bought and paid for" candidates), then this same elite will have a huge incentive to go after him. And while he may be "Teflon", most of his voters are not. The establishment will use cherrypicking and their media influence and money to portray his voters as either

• dumb white trash
• frustrated middle aged men
• stormfront type guys
• extremely naive traditional subservient housewifes
• etc.
  

It's easy to find people among his proponents who actually are like that, and persistently show them all over the TV screens and social media channels when you have the influence and money to do it. Then people will start to emotionally disconnect from being a Trump voter because they don't want to be in the same social group as these people. It will be tough for Trump to counter this. I mean, he's good on the offense, but I'm really not sure whether he will be as good on the defense, especially when it is subliminal messaging with no clear origin that he has to counter.

So I gave myself the timeframe of betting on him only until the end of January (the primaries begin in february) My thinking is that until then, nothing big will happen, and the market will slowly but constantly move into the direction of giving Trump at least a "1 out of 5" chance.

My current estimation how my bet will resolve is that:
- I already bet roughly 1.000 Euros on him at 12.5 = (-1.000) Euros if he loses, (+11.500) if he wins
- I will bet 8.000 Euros against him (*) once the odds come down to around 5 = (+2.000) if he loses, (-8.000) Euros if he wins

On aggregate, this will be
- +3.500 Euros if he wins
- +1.000 Euros if he loses

Only time will tell if I am correct in my prognosis, it can be completely different and Trump can be out next week, before I get the chance to hedge my bet on him. So don't trust my judgement. If you intend on betting you have to make up your own prediction - I'm just telling you what kind of thinking informed my bets in this market so you can compare it to your own forecast in case you intend to place a bet.

(*) I don't really need to pour 8.000 Euros from my credit card into a betting website to place an 8.000 Euro bet - I can use my potential winnings from my bet ON Trump to bet AGAINST him

Post: #3

Now let's talk about the biggest problem with political betting: If you're not from the UK, most probably you're simply not allowed to do it...

Most governments have outlawed betting because

• they see betting as potentially addictive and financially ruinous
• most countries have national lotteries and betting websites offer an alternative to them, taking away their market share
• british companies dominate the betting market, so even if a company from your country can establish a successful betting website, most of the money will probably flow from your citizens to a british company
  

In Germany, I am officially only allowed to bet on fixed odds (decided on by the betting company). These are significantly worse than the free odds that the betting market will give you (which come into being by thousands of other civilian punters betting money at rates that they decide completely on their own).

For example here you can see the fixed odds that I would get for voting for Trump on the right side, and on the left side you can see the much better free odds, which I'm not allowed to bet on:



Betting companies will be strict on this issue and you need to provide them with proof of where you are currently living, so there's no easy way around this legal situation (like just pressing a button where you confirm that you live in England, or changing your IP adress to an english one via a free proxy website) They will want a utilities bill from you, for example the last invoice from your local power provider etc.

The good thing however is that you can always count on governments being slow to react to anything that happens on the web, and companies to emerge where there is an under-served need

For me, I found a website that is based in one of the channel islands that has not (yet) blocked german citizens from using its' betting market. For you (since the situation may be different in the country you live in) what you can do is check out this overview of betting websites that offer political betting on the presidential election and see whether they accept your bets.

One word of warning however: most of these websites

• will accept your money and deduct a fee upon charging your credit card (usually 1.5%)
• but still not allow you to bet on their free market - only on their fixed odds
  

So before transferring money to them, check out the situation by talking to their live support - every good betting website has one and they are very quick to react.

This is the end of my 3-part-data sheet. I know it's not comprehensive at all, online betting is a complex subject and as I said I only place bets sporadically, but I hope it gave you some interesting insights nevertheless.

Post: #4

A nice addition to the forum. However, I think it should probably be in the lifestyle sub-forum.

Oh yes, I'm so privileged you literally can't even.
Interested in joining the FFL? I tried (and failed).

Post: #5

@Sgt Vielen Dank fuer den Tipp!

Post: #6

Thanks a ton! You could have titled it "Betting Datasheet" but still useful as hell.

Rep given.