Halloween may not have been that terrifying in lock-down, but there are few more frightening prospects that watching the US Presidential Election results tonight. From the outside the choice looks simple, but betting on a mass expression of common sense from the US electorate has recently become a quick way to the poor-house. So setting aside rational outcomes, what can we actually expect?
If the polls are to believed it should be a comfortable night for Joe Biden. He holds secure leads in Michigan and Wisconsin, good leads in Arizona and Pennsylvania, and narrow leads in Florida, North Carolina and Georgia as well as being nip and tuck in Iowa, Ohio and even Texas. President Donald Trump can afford to give up Michigan and Wisconsin but pretty much needs to sweep the rest to win. That would need a widespread systematic polling failure – and therein lies the rub.
2016 saw just such a failure and hence why both opinion and betting markets reflect a nervousness about drawing a strong conclusion from the polls. That said on the plus side the polls have amended methodologies to attempt to eliminate the sources of error last time, on the minus side we have a pandemic, a massive increase in early voting and a likely huge turnout all creating room for error even before the more nefarious acts of voter suppression, early claims of victory, and ballot exclusion threatened by the Trump camp.
All that being said, polling aggregator 538 currently rate a Biden win at 90%, which seems about right. They rate a blue sweep of Dem wins in the presidency, the House (all but certain) and the Senate (where they need an achievable 4 seat net gain) as around 75%. Paddy Power offer us 11/10 for that same outcome – so we will hopefully pick up some easy money there to fund a more speculative poke.
With correlation a big factor, either in polling error or in simple voting swing, the midpoint expectation the bookies have of Biden winning around 350 electoral college votes looks vulnerable to significant volatility down to a near dead heat in a Trump favouring direction and up to a ceiling of around 412 for Biden on a big night for the Dems.
A more interesting market than margin of win, is the state with the narrowest margin (measured as a percentage rather than absolute). Betfair price up Florida as favourite, but that’s a hard call in a stae with a lot of moving parts, Wisconsin as second favourite looks ridiculous and Ohio in third favourite would need to be a big night for Biden. Texas is interesting but Biden might fall just too far short there. The winner here though could be North Carolina.
The state was an Obama win when fuelled by high turnout from the African American voters but swung to Trump last time. The stronger position of Biden in the national polls, and a very strong performance for him here back in the Democratic primaries are reason to believe Biden can win and he is polling just under 2% ahead. If there is a late adjustment back towards Trump as in 2016 it is likely to be smaller generally and smaller in the Sunshine states like here and maybe more marked in the Rust belt. A small swing to Trump here could turn this state into an absolute toss-up, and the 12/1 that it returns the narrowest margin looks excellent value. This is also one of the few states where we may know a firm outcome on the night.
Right, now let’s get some popcorn in and find a big cushion to hide behind…..
Democrats to sweep Presidency, House and Senate, 1pt win, 11/10 Paddy Power
North Carolina to have smallest margin of victory, 1pt win, 12/1 Betfair
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