Earlier this month, I visited the Fox Studios to discuss the concept of political betting, past and current US elections and whether these markets represented a superior guide to predicting the result than opinion polls. Here’s the interview with Benjamin Brown.
Archives for September 2016
I’ve been saying for ages that the distribution of electoral college votes is my ideal strategy for the closing stretch of the election and today, I’ve published my first bet.
— Political Gambler (@paulmotty) September 30, 2016
To be honest, the lack of liquidity in Betfair’s Clinton Electoral College Votes market is frustrating, although I still expect it to liven up. Otherwise, we’re stuck betting with bookmakers who are liable to restrict or ban you for being a shrewd gambler. Nevertheless, here’s my logic.
Regular readers may recall how we made money out of Brexit. The core plan, that set everything up, was backing a narrow win for Remain via the 50-55% band and hedging between handicap markets to create a ‘middle’ of 50-52.5%. That allowed a cover on Leave, that meant we were effectively laying under 55%.
I was always very confident that Remain wouldn’t go above that percentage and once it became clear on the night that it wouldn’t, covering on Leave to ensure the maximum profit was easy.
The electoral college offers a similar opportunity. We can all try and predict the exact distribution of votes by correctly predicting the result of every state, but the margin for error is obviously big.
For example, Obama won 332 votes, which seems a good benchmark to start from as it’s plausible that they all go exactly the same way. The odds taken today imply Clinton has just a 17% chance of getting between 330 and 359. I reckon that’s a big understatement and that the odds will move our way.
However it isn’t an exact prediction. Take one state away and she falls below our band. Add North Carolina’s 15 votes though, and Clinton has room for error.
Plus we know the Trump effect is not uniform, bringing other states into play. If he has a very poor result, Arizona, Georgia and Texas could dramatically alter calculations. On the other hand, Iowa looks a state he could win even on a bad night. Ohio remains a very realistic gain even if losing nationally. If he performed much better than expected, a shock in one of the North-East states cannot be totally dismissed.
So my plan is to build a book, just like Brexit, where I’ve got odds that decrease between now and polling day. My opinion remains that Clinton is on course to win well. That he is going to struggle to win any swing state. 347 – Obama states plus NC – is realistic.
If it looks set to go that way, the 360 or more band might be the right cover to have, in case AZ or one of the other upsets go for her. If closer, I’ll cover on one or more of the lower bands. Or perhaps just cover on a specific swing state or two. Watch this space for updates.
This was one of the highlights of my entire US election tour. After several phone interviews with Frank Truatt and Taylor Sterling, I was invited to be the special guest on two shows, spending the whole morning at WTBQ Radio in Warwick, New York. After their show, I stayed on air with Orange County Legislator Jeff Berkman.
Over the course of three hours, we discussed the first presidential debate and looked both back at the election cycle and predictions for the closing stretch. Naturally, UK politics and Brexit also came up!#
It was a fantastic couple of days in a beautiful town, meeting lots of interesting people. After the show, I was invited for an excellent lunch at the Rotary Club. In keeping with everyone else I’ve met over here during the past year, the people of Warwick could not have been friendlier.
I’ll be going back for sure and strongly recommend this unique part of America to anyone visiting the country. If you visit and are looking for a place to stay, do contact Loretta at Warwick Valley Bed and Breakfast – a wonderful host with an outstanding, beautiful property.
Here are my interviews in five separate parts.
1 Clinton reversed a bad news cycle to resume pole position
Heading into Monday’s opening debate, Hillary Clinton backers had plenty to worry about. A combination of health concerns, intense scrutiny of her e-mails and foundation, plus some improved performances from Donald Trump had whittled down a substantial poll lead to a virtual dead-heat.
Her Betfair rating had fallen from 80% to 64%, with Trump hitting his shortest odds yet at 2.68 after some very promising numbers in swing states. Yet almost from the moment proceedings at Hofstra University begun, money poured back in for Clinton. 95 minutes later, she was back to 1.45 (69%), around the same odds as before a health scare at a 9/11 memorial and admission she was suffering from pneumonia.
By winning the debate – by almost unanimous consensus besides die-hard Trump supporters – Clinton has reversed the narrative. Rather than being at death’s door – as so many internet rumours had claimed – she looked strong and confident throughout. Instead it was Trump who tired, with his performance deteriorating as time progressed.
In doing so, the narrative has switched back from whether she is fit to be president to what most voters regard as dubious credentials of her opponent. Whilst we await the polling fallout, it seems likely that at least some of that lead will be restored.
2 Trump flunked his best and perhaps last opportunity to reset a negative image
As noted beforehand, the biggest challenge for Trump was to reverse the widely-held perception that he was unqualified and lacked the temperament to be president. Again, we await updated polling evidence but it seems highly unlikely that he even begun to pass that test. Quite the reverse. When he boasted ‘I have a great temperament’, Clinton’s laugh said it all.
1 Hillary Clinton’s health and appearance
One might like to imagine that a debate to determine leader of the free world would be settled on a sombre analysis of their respective policy credentials, but it has never been the case. Or at least since presidential debates became televised in 1960. Famously, Richard Nixon won that opener among radio listeners but lost the TV audience, thanks to his pallid, sweaty appearance. He never recovered from that, and JFK was elected.
So it should come as no surprise that much of the pre-debate chatter, including among bettors, concerns how healthy Hillary Clinton will appear on Monday night. Three weeks ago, I noted that her health would be one of the key stories to follow throughout the campaign. Within a few days it became the dominant narrative after she appeared to faint following a 9/11 memorial and was forced to admit to suffering from pneumonia.
The Conservative media and internet is awash with rumours of her demise. Many raise legitimate questions about why news of this illness was held back, whether it really was pneumonia and why her schedule remains extremely light. Others simply claim she’s dead and been replaced by a double.
Arguably the biggest single reason behind Donald Trump’s successful bid for the Republican nomination was the fact he has never been a politician. In an era when professional politicians and loathed and distrusted like never before, Trump’s outsider status captivated a conservative audience that yearns for someone to shake up the establishment. Entering the final stretch of the race to be Next President, however, amateurishness could prove his undoing.
At this late stage, having a professional, well-resourced organisation is critical. With more or less 80% of minds already made up, the key is getting them to the polls and targeting the other fifth. That could be via holding rallies in swing counties, mobilising volunteers, television ads, e-mails or other forms of direct messaging.
In order to so effectively, you need to know exactly who to target, where to find them and what messaging they are most responsive to. Otherwise you are wasting precious time, energy and cash. Getting this right can create a decisive advantage over your opponent.
Gathering and utilizing the necessary data is an expensive, specialised task and it’s importance cannot be understated. It is a staple of the modern political campaign and some say the key determinant in recent elections that blindsided the polls and made a mockery of a media narrative that declared them to be on a knife-edge.
This week, the result of the Labour leadership contest will be announced. The market rates Jeremy Corbyn overwhelming 98% favourite to win at 1.02 but, as announced on Twitter last week, I’m taking no chances and took my 22 unit profit when the odds went to 1.04. Why take the risk when there are party managers trying anything in their power to stop him?
I know Eoin, he isn't a Trot/entryist & doubt his pals are. Makes me suspicious so am greening up Corbyn bet at 1.04 https://t.co/Mq9KK3gSt7
— Political Gambler (@paulmotty) September 16, 2016
Re previous tweet; initial bet 30u Corbyn @ 1.9, now laying 50u @ 1.04 #Labourleadership
— Political Gambler (@paulmotty) September 16, 2016
Assuming they don’t succeed, the chances of a fresh start are negligible, to say the least. Judging by the relentless vitriol from both sides – but particularly his Westminster opponents, who have access to the mainstream media – this can only end in a split, or at least the sort of electoral disaster that renders the party irrelevant.
To repeat, I do not regard Jeremy Corbyn as being a potential Prime Minister. Far from it. With Scotland gone for the foreseeable future at least, Labour need to win in parts of England where their brand is toxic, their organisation non-existent and their philosophy despised. Whoever is leader, the only game in town is a long one.
Yet rather than get on with the long haul or attacking the Conservative government (surely page one of any comeback manual), what I call ‘Mainstream Labour’ persist with petty, trivial attacks on their leader.
Corbyn is held to a standard that was never applied to his predecessors, or indeed to any of the possible alternatives for leader.
He’s attacked for being unelectable. But what evidence is there that any of last year’s three rivals were, let alone the hapless Owen Smith? In my view the latter would win no more votes but lose a hundred thousands members.
He’s attacked over the most trivial of issues – his answer to a question about his favourite biscuit or choice of holiday reading material. Rather than giving a genuine answer that reflects his personality – a political anorak that openly doesn’t engage popular culture – they imply he should be more populist.
The implication is that Corbyn should ape Ed Miliband’s widely ridiculed attempt to order a pasty from Greggs. Or Gordon Brown endorsing the Arctic Monkeys. Or tour the country in a pink bus to show he’s on the side of women (a farce that blame-shifting Labour MPs soon forgot when they chose to make Miliband the scapegoat for last May’s defeat).
People still cringe about these PR tragedies yet presumably these nerdy, intellectual Labour leaders fell into the trap after receiving advice from the same ‘professional’ advisers that snipe at Corbyn every day on Twitter? And if Corbyn did go down that route, they would be the first to condemn the opportunism. He’s damned either way.
The Conservatives would never self-destruct like this. David Cameron was a master of publicity stunts that went wrong. Claiming on different occasions to support different football teams is the ultimate PR sin, (and occured in the middle of an election campaign), yet his colleagues and friendly media simply ignored it.
Cameron even had to delay a set-piece conference speech (keeping everyone waiting for an hour) because various critics had pointed out that his pre-released blurb about household debt was economically illiterate. It was barely mentioned again – not even by these same Labour voices that now ruin their own leader over answering a biscuit question wrongly!
On policy, he’s attacked for being too left-wing but in reality, where are the dramatic differences? On domestic issues, they barely exist. He got into some trouble for talking about decriminalising prostitution. Besides that not being in the top hundred important electoral issues, I’m not sure that’s a vote loser.
Where they do disagree, of course, is over foreign policy and nuclear weapons. On the latter, Mainstream Labour are correct to say the English public are not about to vote for a leader that gives up Trident.
But on the former, again Corbyn’s enemies are in denial about the party’s recent history. The Labour rot begun to set in after Tony Blair sent troops into Iraq. Critics like Corbyn were condemned as ‘appeasers’. The Chilcot Report vindicated them, and shamed Blair.
Last week, the Tory-led Foreign Affairs Select Committee condemned Cameron’s rush to war in Libya, enthusiastically backed by most Labour MPs. Again Corbyn rebelled, as with pretty much every vote for war throughout his career.
This is why the two sides hate one another and there is no truce in sight. Labour members are deeply sceptical and sometimes wholly against military action. Most Labour MPs vociferously support it and think Britain should be taking a lead in the Middle East. A circle that cannot be squared and fundamental political question that will inevitably arise again.
Whoever wins the leadership contest, Labour need to get a grip, unite and move forward. It won’t happen. A split or the deselection of MPs is the only realistic answer. We could be looking at a collapse on the scale seen in Scotland.
If you’ve got any spare cash that you don’t mind tying up for a while – potentially four years but it isn’t unimaginable that the next election is sooner – stick it all on the Conservatives to win the most seats at 1.33 with paddypower.com. A money printing job if ever there was one.
There is no precise, scientific means of explaining what determines elections, opinion polls or betting markets. Each election and each candidate is unique, and even the individual voter cannot reliably explain why they react in a certain way.
My belief, held pretty much throughout my adult life based on the experience in England, is that the number one factor is media. Not necessarily editorial bias (although that matters) but narrative created over both long and short-term.
Historically, that has meant that any serious candidate has to win over the mainstream media – in particular TV. Yet this presidential cycle has been so different that many are beginning to disagree. Now it’s all about Twitter, social media and maybe a few friendly outlets that will do your bidding. Donald Trump proves that. I’m pretty sure he thinks so too, as it would explain a lot.
I disagree and think events over the past few days will destroy his bid. Going to war with the media is never a good move. They helped create him and, now he’s pushed them too far, they’ll destroy him.
Back at the start, they thrived on his every word. Or more likely, tweet. In the bizarre, 17 runner horse race that was the GOP primary, his celebrity and headline-grabbing knack of political incorrectness drove previously unimaginable ratings.
By appealing to enough, if not a majority of the GOP base, he sucked up all the media oxygen. Jeb Bush, the only comparably recognisable name, was the perfect establishment target to bully. It was great entertainment.
Whilst the other 15 jockeyed for position, he opened up a commanding lead. By the time they’d whittled down to a manageable number of rivals, capable of being heard whilst scrutinising Trump’s dubious credentials, it was too late.
With the nomination secure, Trump had the floor to himself and set about running the most inept campaign in history, with one gaffe after another. The election became a referendum on an ill-qualified, offensive candidate and the media spotlight merely served to exacerbate his toxicity with a majority of voters.
Consequently without doing anything to enthuse the country or deal with her own fundamental weaknesses, Hillary Clinton became the president-elect, well clear in the polls.
However with that came scrutiny and the moment Trump managed to avoid controversy for a couple of weeks, the gaping holes in Clinton’s case became clear. Hence her recent catastrophic news cycle. Once again, the polls responded to the news cycle and this week Trump erased her longstanding lead.
Now the media had the toss-up contest they craved, the trend begun to flip back. I’ve felt the news cycle was turning against Trump for days – scrutiny into his lack of transparency on health and more importantly, business affairs and tax returns. Then finally yesterday, Trump’s past caught up with him.
It has been something of a mystery how Trump has gone through this entire cycle without anyone pinning him down over the infamous birther theory. Whatever his surrogates or fanatical supporters say, 99% of humanity associates birtherism with Trump. He popularised this conspiracy theory and led the charge.
It isn’t just liberals who see it that way. Less than a year ago, he threw the same attack at Ted Cruz and retweeted this about Cruz and his other main GOP rival Marco Rubio.
— Donald J. Trump (@realDonaldTrump) February 20, 2016
There are legions of tweets and TV interviews to prove it, many of which are now doing the rounds. Trying to blame birtherism on Clinton – relentlessly debunked – will only wash with the most on-message Trump supporter. An e-mail from a low grade, anonymous operative is no more Clinton’s responsibility than the picture of Melania that caused such trouble after Wisconsin was the personal responsibility of Cruz.
This line is not going to convince open-minded swing or undecided voters. As with Trump’s revenge attack on Heidi Cruz, persisting with it will only keep the issue alive and rebound on him.
Birtherism alone is not going to determine the election but Trump’s response to the scrutiny may do so. This could have been a straightforward apology and acceptance that he made a mistake. Job done and everyone moves on to more serious issues. This was a brief window when Trump could have pivoted and even tried to claim the centre ground, appearing presidential. It has closed.
Instead, by building a media frenzy, using them for free airtime and then completely failing to deliver, Trump could not have played it any worse. His 34 second, unapologetic statement, merely acknowledging Obama was born in the States, blaming Clinton and refusing to take questions, has made enemies of the overwhelming majority of journalists. The 25 minutes free air-time of veterans endorsing him is a small gain at a potentially massive cost.
This is now about more than politics. Nobody likes being played and they can see how a President Trump would treat the media and the general idea of scrutiny. The furious language and headlines being thrown around by largely neutral organisations – liar, conspiracy theorist, racist, conman – is not business as usual. Even if journalists thought that, they were mostly biting their tongues.
For sure, Trumpians will claim CNN, NBC and the Washington Post are systemically biased against their man. That’s their perspective. I disagree, having watched and read endless scrutiny into Clinton’s e-mails and foundation on those outlets. They’re as imperfect as the BBC, but they try and scrutinise both sides and let them have an equal say.
There’s been a lot of media handwringing about what Trump has been allowed to get away with in the past. Bullying Megyn Kelly and walking away from the Iowa GOP debate. Not raising this explosive birther issue in numerous debates, town halls or interview opportuntities. Failing to meet the same transparency standard as all recent presidential candidates on health and tax. Making pledges on that front, then not delivering.
I think all that changes from now. The media no longer need Trump to drive ratings – at this stage of the cycle, intense public interest is a given. Going after him would be just as good for ratings.
Trump clearly believes he doesn’t need them. That a coalition of Fox News (which isn’t totally beyond criticising him, if nonetheless predictably one-sided), Breitbart and the internet can propel him to the presidency. I don’t buy it. There aren’t enough undecided voters in that pool and anyway, plenty of conservatives are disgusted by birtherism.
Moreover, those one-sided outlets rarely shape the overarching media narrative. If they did, Democrats wouldn’t have won four of the last six presidential elections, and the popular vote in a fifth.
It’s interesting to see John Kasich doing media interviews this week, trying to forge common ground with Obama over trade. As soon as I started doing US media I said he was the most electable GOP candidate and remain convinced that he would have won a landslide against Clinton.
Kasich is the definition of the candidate the middle ground (that decide elections) desires. A pragmatic politician who doesn’t trade in personal insults and can reach across the aisle. The Governor of Ohio says he almost certainly won’t vote for Trump. I wonder if that non-endorsement alone has a negative effect in a state he absolutely must win.
I’ve never wavered from my belief that Clinton would win but there’s no denying the previous week had been a disaster for her. Now it feels like ancient history. I reckon we’ll once again see this changing media narrative affect the polls, Clinton restore her lead and talk of a landslide resume.
We’ve just seen two milestones passed on Betfair’s Next President market. First, the total matched has passed $50M – my estimate is it will go beyond $200M by polling day.
Second and more significantly, Donald Trump has passed another threshold in trading below [3.0]. At [2.96], equivalent to a 34% chance, he’s at his lowest odds yet in response to an unarguably strong run in the polls.
At [1.63], Hillary Clinton is bigger than when I backed her two days ago at [1.57]. I’ll get to that shortly but the key number for me remains how the prospect of ‘others’ is over-rated. The current odds imply there is better than a 6% chance of someone else becoming president – in my view it should be less than 1%.
Some of Trump’s recent momentum is easily explained by Clinton’s shortcomings and a catastrophic news cycle, that culminated in her fainting on Sunday. As explained on Tuesday, I think this is probably her low point and expect improvement over the next week or so.
The news cycle has shifted a bit with more scrutiny of Trump’s comparative lack of transparency regarding tax returns and business interests. Obama’s intervention could make a slight difference and if she bounces back on the campaign trail today, this could easily swing round. My general approach is to cut through the inevitable froth and over-reaction and I remain confident that the fundamentals favour Clinton.
Nevertheless, I must acknowledge other important factors that lie behind this rise. Trump has indisputably improved his performance, especially by using a teleprompter. That means less gaffes and he’s exercising more self-control on Twitter. Given that his opponent is almost as unpopular, that has meant she sucked up the negative publicity for a change.
The other big problem for Clinton is the good numbers for Gary Johnson and Jill Stein, especially among millennials – a key component of the Democrat coalition. I’ve written before how these voters hold the key to the final result and offer Trump his best route to the White House. We’ll see what happens to their share after the debates, assuming Johnson doesn’t get in.
Right now, this is bad news for my positions. I could take an early hit and start again from scratch but still prefer to play the long game.
Regarding strategy going forward, I need the state and electoral college markets to liven up. Whilst I understand why the odds are moving towards Trump, I remain convinced that they represent vastly inferior value compared to less ambitious targets.
The electoral college remains overwhelmingly in Clinton’s favour and this is not accurately factored into the outright odds. Let’s say she were to lose Ohio and Florida – something I’m not assuming but recognise is a real possibility. This still isn’t nearly enough for Trump.
Clinton’s easiest route involves winning NH, WI, CO, VA, PA and MI. The polls, odds and general consensus suggests she is strong favourite in each of them. Then there is the gamechanging state of North Carolina, which Romney won in 2012. If Clinton wins those 15 electoral college votes, we can remove New Hampshire and Wisconsin from the aforementioned firewall (or just Virginia).
We must also remember that Trump has altered the map, bringing other states potentially into play. Arizona, Georgia and Texas are all in-play according to the polls. Given her ground game advantage, she could steal a state or two that Republicans normally take for granted. A much improved Hispanic turnout – not accounted for in polls – changes the maths in several key states.
There are cover bets and new angles to be had at some stage involving these permutations. Watch this space.
On Monday, I spoke to TRT World about the impact of Hillary Clinton’s health scare on the election. I argued that, whilst the belated admission of pneumonia damaged her brand, reinforcing perceptions of secrecy and dishonesty, the incident actually presented an opportunity. If she now issues detailed medical records, it would transfer pressure onto Donald Trump to release his tax returns. We’ll see how that plays out!