This piece was first published on February 6th at betting.betfair.com
Its happened again. One race into the 2020 US Election and the betting carnage is underway. With 97% reporting from the Iowa Caucus, just 0.1% separates Pete Buttigieg and Bernie Sanders in terms of delegates.
Iowa produces another massive betting flip-flop
The former was matched at [1.02] last night for substantial sums, but is now out to odds-against at [2.18]. Earlier in the piece, Sanders had been matched at [1.14].
The one conclusion we can certainly draw is that there will be no clear winner and therefore no clear narrative moving forward. With nobody reaching 30%, the betting on the race to face Donald Trump in November remains wide open.
Next we move onto New Hampshire, which hosts its open primary next Tuesday. Nine candidates have a big TV platform from which to make their case in a series of CNN Town Hall events, before a seven-way debate on ABC this Friday.
Friday’s debate could be pivotal
Given the moment, the importance of this debate should not be understated. A mistake, or a star performance, could be transformative. That was certainly the case in 2016 on the Republican debate stage, altering the dynamics of the race and ruining the market leader for their nomination.
Heading in, three Republicans were well placed. Ted Cruz had won Iowa, Trump was ahead in the NH and national polls, but Marco Rubio was flavour of the month on Betfair. A late rally for third in Iowa had positioned him clear top of what pundits had defined as the ‘establishment lane’ that had won recent nominations – as opposed to the ‘outsiders lane’ where Trump and Cruz resided.
From his first contribution, Rubio imploded. Under attack from soon-to-be Trump surrogate Chris Christie, Rubio repeated a 25 second speech, word for word, immediately after his opponent had called out his reliance on memorised 25 second speeches. Literally within seconds, Rubio’s odds on Betfair markedly. He never recovered. Trump won NH easily and the establishment challenge faded.
Can Democrats be divided into lanes?
Many of the same dynamics are in play for the Democrats this time. A similar narrative regarding ‘lanes’ is prevalent – ‘moderate/establishment’ versus ‘progressives/socialists’. Tactics must involve attacking, usurping and forcing out those within your lane. New Hampshire is usually the race that whittles the field, as unviable campaigns lose relevance and run out of money.
The lanes theory involves the dubious assumptions that voters will stay in one lane. It didn’t hold up in 2016, as GOP primary voters previously ascribed to an establishment name switched to Trump or Cruz. However at this stage, lets assume the theory has some merit and run with it – if only because it will motivate debate tactics and the inevitable sniping on Twitter.
Coming out of Iowa, six candidates seem viable – of whom five will be on the stage (Michael Bloomberg must wait for Nevada). Bernie Sanders core vote is solid but, to consistently record winning totals, it is assumed he mostly needs to eliminate Elizabeth Warren. In that sense, Iowa wasn’t such a great result for the market leader.