Bettors say Biden should bow out

Also, do bettors listen to Nate Silver?

Last week was an eventful election week! Let’s look at how betting odds shifted in response to news.

On Tuesday, the site I created, ElectionBettingOdds.com, looked like this:

The odds reflected a close race. Trump was favored at 54% — but that’s still pretty close to a coin toss.

The narrow race was reflected in the map, which showed that the most likely single outcome was still a Biden win, 270-268. That didn’t mean Biden was favored overall, because Trump has a greater number of electoral paths to a win, and the swing states that leaned Trump were more safely in his camp than the ones that leaned Biden.

Bettors react slightly to Nate Silver’s model

Nate Silver released his new election model just after noon on Wednesday.

Silver is the election modeler with by far the best historical track record — it’s good enough that he (barely) beat prediction markets, as measured by ElectionBettingOdds.com, over the period of 2016 - 2022. Interestingly, taking the average of Silver’s model and ElectionBettingOdds.com was even more accurate than looking at either one.

Silver came out swinging with his new model, giving Trump a 65.7% chance:

Silver’s initial election forecast on Wednesday, June 26, 2024

That’s much higher than the 53.9% that the betting odds gave Trump.

I’ve often been asked — can we really know who’s more accurate, bettors or Nate Silver? After all, bettors have the option of copying Silver.

So I was curious to see how the bettors would react to Silver’s just-released model. During the course of the day, in which there was no big polling shift, bettors did update their predictions a bit:

Specifically, in the seven hours after the model’s release, bettors erased about 15% of the gap between their previous estimate, and Silver’s.

So it seems bettors do pay attention to Silver’s model, but not that much.

Debate night moved the odds more

Just 27 minutes into the Trump/Biden debate on Thursday night, bettors adjusted sharply towards Trump:

By the end of the debate, bettors had split up Biden’s lost odds relatively evenly between A) Trump, and B) Democrats who would get a shot at the Presidency if Biden backed out of the race:

After the debate, Biden’s odds fell still further, as even left-wing commentators on CNN and elsewhere panned Biden’s performance, and suggested that he should withdraw. Later, even the NY Times editorial board called for Biden to step aside.

Here’s the change in the odds, with the arrows showing the change over the whole of last week:

As of Sunday, June 30, 2024, 11:20pm

Interestingly, the majority of Biden’s lost chances now go to other Democrats.

Here’s what the nomination odds now look like:

As of Sunday, June 30, 2024, 11:20pm

Conditional odds say that Democrats SHOULD try to replace Joe Biden

We can use the above statistics to estimate “conditional” odds — in other words, the chance that any given candidate will win *IF* nominated. Here’s what that shows:

Specifically, if Newsom were to be nominated, he’d probably beat Trump.

But if Biden stays in, Trump will have a 2/3rds chance. That’s no longer a coin toss.

These odds are volatile, as they combine and magnify any errors/inefficiencies in both the nomination and President markets. But over time, they do give a sense of electability.

Conclusion

This was an eventful week, and the betting odds tell us a couple of things:

— Democrats absolutely could still win.

— Even Biden still has a path to winning, but Democrats would have much better chances if they replace him

— Bettors don’t react that much to Nate Silver’s odds; historically, it’s best to take an average of his model, and the bettors’ predictions.

More …

Republicans are likely to take the Senate:

House control is a toss-up:

Trump is likely to pick former North Dakota governor Burgum, who has good business experience — or Yale-educated populist JD Vance (who’s also the author of a good book, Hillbilly Elegy)

You can go to ElectionBettingOdds.com for live odds!