This article first appeared at betting.betfair.com on August 28th 2020
Following the Democrat and Republican conventions, the verdict from Betfair punters is clear. Donald Trump has a considerably better chance of re-election than he did when they started.
Trump breaks new political betting record
Indeed yet again, Trump is making political betting history. Since Betfair’s inception in 2001, no candidate has ever enjoyed a bigger convention bounce and an avalanche of money has arrived on the exchange for him in recent days.
Yesterday was the first of this election to see £1M traded on the Next President market. According to our odds, his implied chance of victory has risen from 41% to 49%. He may very well re-take favouritism over Joe Biden by the end of today’s trading.
Double convention bounce is a positive indicator
Moreover, Trump’s recent comeback is a very positive indicator for November. Analysis of the previous four elections shows that only Barack Obama in 2008 didn’t see his odds improve during the conventions. Both previous incumbents to enjoy a ‘double convention bounce‘ went on to win – George W Bush in 2004 and Obama in 2012.
At 6.1% higher than the day before the DNC Convention, Trump’s bounce is bigger than either. When Bush won, his odds increased by 5.67%. Obama increased by 3.67%. Note too this bounce is nearly four times the scale of the one Trump enjoyed in 2016.
How much store should we would place in these moves? Should punters jump on this bandwagon or do the moves in fact make Joe Biden the superior value?
Trump can regard convention a success
In my view, Trump is entitled to judge the convention a success. Critics and internal opponents were nowhere to be seen. His party is now both loyal and on this public evidence, devoted to their leader.
Whilst it may have infuriated opponents and political experts, sparking calls for charges under the ‘Hatch Act‘, Trump utilised his office to great effect. For example, using the Rose Garden and White House South Lawn for speeches, is surely a positive image for the brand.
That said, any assumption that the convention played well with the public is exactly that. There is little or no evidence of improving polls. There is a survey of 2,500 voters from B/C rated pollster USC Dornsife out today which records Biden a whopping 15% up. Public engagement with both conventions was down on 2016.
One plausible explanation for the gamble is that Trump supporters and backers were in such high spirits, they put their money where their mouths are.