The big stories on election betting markets this week have been (a) a series of massive upsets on Super Tuesday and (b) the ongoing uncertainty about just how likely Donald Trump is to be the Republican Nominee.
As the Super Tuesday results came in, virtually the entire media bought into the same, simplistic narrative. That Hillary Clinton and Donald Trump had swept all before them. In Clinton’s case, that ignored Bernie Sanders winning four races, although the Democrat race does remain very one-sided. Clinton is virtually unbackable at 1.08 – and only meaningfully opposable if you buy the theory that she will be indicted over her e-mails. I don’t.
The GOP race, alternatively, remains an incredibly interesting betting heat. In the immediate aftermath of Super Tuesday, as people took headline results at face value, Trump hit his shortest odds yet at 1.25. However, as I tweeted repeatedly on the night, this was a misread of what actually happened.
Lots of simplistic #SuperTuesday analysis, taking Trump wins at face value. 7 wins, inc small margins, was well below expectations 24hrs ago
— Political Gambler (@paulmotty) March 2, 2016
Cruz wins Alaska, despite the Palin factor. Not the one-sided Trump night suggested by recent polls or headlines. Now I must get some sleep!
— Political Gambler (@paulmotty) March 2, 2016
Look a little deeper and the numbers suggest Trump underperformed, markedly in some states. In Oklahoma, the RCP polling average had him 11% up. He lost by 6% to Cruz. In Virginia and Vermont, he was rated 15% up, yet only won by 3 and 2% respectively. There was virtually no polling in Alaska or Minnesota, but defeats there were massive betting upsets.
On the other side of the ledger, the massive win in Massachusetts was on a similar, overwhelming scale to previous victories in Nevada, South Carolina and New Hampshire. If those places are indicative of the GOP contest, Trump will indeed be the nominee.
I have a suspicion, though, that the wider underperformance indicates a slow cracking of Trump’s invincibility. The dynamics of this race only changed last Thursday – too late to meaningfully affect Super Tuesday – at the CNN debate in Texas. After months of a counterproductive cage fight, where Trump’s rivals attacked each other in a bizarre race for position, rather than the front-runner, the new narrative is Trump versus the rest.
One big difference is the new friendly, collaborative relationship between Marco Rubio and Ted Cruz. In Texas, they went after him throughout, on a lifetime of inconsistent policy positions, his failure to public tax returns, electability, failed business projects, Trump University, donations to the Clinton foundation.
Whereas Rubio had previously allied with Trump in trying to destroy Cruz in South Carolina, now he switched sides and went after Trump. Their war has famously continued since, in a wierd exchange of personal abuse.
Cruz too now seemed like Rubio’s ally. Immediately afterwards, he told interviewers that ‘Marco is my friend. Not my enemy’. He’s since added that “Marco would make a much better President than Trump.” The pair even shared what seemed like a pre-planned joke at Trump’s expense in last night’s Fox Debate.
The effect has been to finally generate some real pressure from the media on Trump – particularly when he equivocated in condemning the KKK and David Duke on CNN last Sunday.
Perhaps this explains why Trump performed way below polling expectations on Tuesday. This is something I’ve been arguing in interviews all week.
The market finally woke up to this changing narrative yesterday, as Trump’s nominee rating fell from 77 to 64%. While I would love to believe it was due to punters listening to me, the reason was almost certainly Mitt Romney’s full-throttle attack on Trump yesterday.
Romney and Rubio very much represent the party establishment, and their words are going to be very hard to backtrack on if Trump becomes the nominee. In my view, it all points towards Trump having a very difficult time negotiating a brokered convention should he fail to win 50% of the delegates.
As Melissa Caen explains here, the party retains the power to do pretty much whatever it wants to retain control at the convention. Ultimately, this could be great news for my dream bet on Paul Ryan at 399-1. (I should add that, as explained in a recent Politico article, I’ve doubled up on this bet. However due to the lack of liquidity on these rank outsiders, I didn’t bother listing it on Twitter at the time, because nobody else would have got anything like these odds afterwards).
In a slightly exciting development, The Hill reports a SuperPac forming, trying to convince potential unity figure Ryan to run. We can dream!
However it also remains a strong possibility that such anti-Trump machinations work in his favour – reinforcing the perception that he is the only true outsider, and therefore what the base wants. The forthcoming primaries in Michigan, Ohio and Florida are absolutely pivotal and Trump could win all three, effectively sewing the race up in the process.
Another scenario – again ideal for our betting plan – is that the other two remaining candidates benefit most. Ted Cruz is emerging as the main threat to Trump. If Rubio fails to win Florida, he could theoretically endorse Cruz. In a telling comment, Lindsay Graham – who recently joked about murdering Cruz – said that the party may have to unite behind him to stop Trump.
From looking all but finished at around 200.0 for the presidency and 75.0 for the nomination, Cruz is rising again at 40.0 and 12.0 respectively after his trio of Super Tuesday wins. I felt he thrived at last night’s Michigan debate too, when Trump’s record came under brutal attack from all sides once again. Cruz also has some promising upcoming targets, too.
Don’t rule out John Kasich either. He has steadfastly refused to get involved in the abuse and name-calling, focusing instead on policy. He could be rewarded as the party tires of all the bickering, and has definite chances in Michigan and then his home state of Ohio. Kasich too is shortening in the betting, to 20.0 and 44.0 respectively. As argued back in January on the Steve Hexom Show, Kasich is the Republican’s most electable option.