Construction Literary Magazine

Fall 2019

The Bet of the Century: Gambling on the Election

The Bet of the Century: Gambling on the Election

Photograph via Keith Park

To many people, this is a toss-up election. They see national polls showing a dead heat and think, “This election is 50/50.”

But it’s not 50/50. Across the betting websites, odds on an Obama win nibble around 2/5, which basically translates to Obama winning this thing 5 times out of 7.{{1}} Romney, meanwhile, is usually listed around 2/1, or winning it 1 time of every 3.{{2}} These odds mean that betting five dollars on Obama yields two dollars more on your bet, or 40 percent profit; betting one dollar on Romney yields your dollar and two more, tripling your money.

If it truly were a toss-up, then betting on the 2/1 underdog instead of the 2/5 favorite seems to be the obvious course of action. It also seems that all the betting websites across the world are stupid.

But they aren’t stupid. They know what they’re doing. One must wonder, then, why expert betting services have Romney at such a disadvantage. Why do they think Obama is a heavy favorite? What do they know that the national polls don’t?

Here’s what they know: in many parts of the country, the president is super-duper unpopular.{{3}} He’s more unpopular in these regions than he is popular anywhere else. Perhaps an admittedly simplified way of saying it would be that the red states are a lot redder than the blue states are blue.

As always, I have tedious numbers to support my argument. First, we return to the national polls. Romney has always looked stronger nationally than he has electorally. For most of the summer and early autumn (before the first debate), Obama was up a mountain of projected electoral votes, but Romney was always within a few points nationally. Even after that debate, a Romney surge to a national head-to-head lead of a couple points outstripped his success in the electoral projections, where he continued to lag behind the president. Only this past Friday did Romney take a narrow lead in the electoral projections when Real Clear Politics switched North Carolina from a “toss-up” to “Leaning Romney.”{{4}}

[pullquote_right]Romney has always looked stronger nationally than electorally.[/pullquote_right]

Now, two weeks out, RCP’s electoral forecast sits at a 206-201 Romney edge, with ten battleground states, comprising 131 electoral votes, remaining (winner needs 270). RCP, however, places any state that has a candidate with an average state poll lead of five points or less as a battleground. With increasingly crystallized opinions and only two weeks remaining to go before the election, I sincerely doubt any state can swing five points. In fact, I think we can narrow that range by 50 percent to a 2.5 point lead being pretty safe.

How, then, do the ten battleground states stack up as of this morning? I’ll rank them by weight and award any lead of 2.5 or greater to its preferred candidate.

Florida (29 electoral votes): Romney +2.1
Pennsylvania (20): Obama +5.0
Ohio (18): Obama +2.1
Michigan (16): Obama +5.0
Virginia (13): Tie
Wisconsin (10): Obama +2.8
Colorado (9): Romney +0.2
Iowa (6): Obama +2.4
Nevada (6): Obama +3.0
New Hampshire (4): Romney +1.0

What conclusions can we draw from this list? First, if we give the candidates the swing states where they have leads of 2.5 or more, we’d add 52 electoral votes to Obama’s total and 0 to Romney’s. That would bring Obama to 253, 17 electorals from victory with 79 still undecided.

Second, we see that in only one of those ten swing states does Romney have a lead of more than a point, while Obama has leads of more than one point in six of them. Granted, that sole semi-safe Romney state—Florida—is the biggest of the ten, but if we give Florida’s 29 electoral votes to Romney because of his 2.1 point lead there (bringing him to 235), we have to give Obama the states where he has a lead of 2.1 or more, too. These additions give Obama the battlegrounds of Ohio and Iowa, which add up to 24 electoral votes. That, ladies and gentlemen, gives Obama 277 electoral votes and a successful re-election. And that’s without awarding the states of Virginia, Colorado, or New Hampshire to anyone.{{5}}

The point is that the president, electorally speaking, still looks safe for re-election. At the very least, his five-point leads in Pennsylvania and Michigan thrust him up to 237 and a lead of 30. While he’s not as big of a favorite as he was before the first debate, he still has decent control over the Electoral College.

Meanwhile, that national head-to-head continues to show this race as a dead heat. As of this writing, Romney sits at an average of 47.3 percent nationally to Obama’s 47.0. Of all polls released in the last week, Romney leads three, Obama two, and there’s one tie. Each candidate leads an outlier—Romney’s 7-point Gallup lead and Obama’s 6-point in the IBD/TIPP tracking poll. Ever so slightly, these RCP statistics tip in Romney’s favor.

These numbers lead me to think there’s a great high risk, high reward bet to be made that isn’t that unrealistic. There is a good chance that Obama wins the Electoral College and Romney wins the popular vote.

[pullquote_right]I often read that Obama leads the black and Latino vote but struggles with the average white person.[/pullquote_right]

This survey helps illustrate. I often read that while Obama might lead the black and Latino vote, he struggles with the average white person. The survey confirms that he trails Romney by double digits in the national “white, working-class” category, 45-32. That is a significant amount, considering the plurality of Americans who are white and working class. Looks like we can extrapolate that Romney will ride this advantage to an election night surprise, right?

Wrong. The survey also shows that Romney’s big lead with “white, working class” voters does not break that way across the country. Romney’s lead in the south among that group is a jaw-dropping 62 to 22. It’s astounding, really; Romney has a forty-point lead with southern, white, working class voters. The south is clearly aligned behind the Republican. Romney, therefore, will not just sweep the south, but he’ll dominate it like no one has since General Sherman.{{6}} He’ll win by substantial margins from Kentucky to Georgia to Texas, significantly increasing his national vote total.

Across the rest of the country, meanwhile, the poll measures the two candidates’ white, working class numbers as comparable. And if white numbers are comparable across much of the country, can we assume the minority vote will break enough toward Obama to give him the edge in the remaining states? Absolutely. He won’t win them by nearly as much as Romney wins the south, but he will win them.

All of a sudden, the incongruence between the national polls and the electoral projections make more sense.

Ultimately, Obama’s 2/5 odds might not make an Obama bettor that much money, while, as shown above, Romney’s chances for victory might not be strong enough to wager with only 2/1 odds. But surely the odds for such a specific prediction like, “Obama wins the Electoral College, Romney wins the National Vote” would yield significant winnings. Unfortunately (or maybe fortunately!) for my bank account, I’ve scoured the Internet but found no such opportunity.

Only three times in American history, mind you, has the national vote winner not also led the Electoral College.{{7}} Keeping in mind the rarity of its occasion and the specificity of the prediction, I’m assuming the odds, wherever they might be, are pretty long. After seeing the stats laid out above, though, it’s clear that result is not out of the realm of possibility. In fact, considering the effect on America and the world, we could be looking at the bet of the century.

Two weeks out and we’re entertaining an Electoral College and popular vote split? Color me excited. See you next week for the final countdown.

[[1]] For you football fans, the high-powered Green Bay Packers were 2/5 favorites over the mediocre St. Louis Rams yesterday, so 2/5 is pretty sizeable. (The Packers, for the record, won by ten points.)[[1]]

[[2]]Why don’t the odds even out? Because the house always wins. Duh.[[2]]

[[3]]”Super-duper” being the technical term for political and gambling insiders.[[3]]

[[4]]Where I suspect it will stay. North Carolina, as the state Obama won with the smallest margin in 2008, was never likely to vote for re-election.[[4]]

[[5]] If all three broke to Romney, he’d finish short at 261.[[5]]

[[6]]What? Too soon?[[6]]

[[7]]1876, 1888, and 2000.[[7]]