President Barack Obama is a 2-to-1 favorite to win re-election over Republican challenger Mitt Romney, according to betting on the Intrade.com political futures market.
The BGOV Barometer shows Obama with a 68 percent chance of victory as of 5 p.m. yesterday. That means it cost $6.80 to win $10 should Obama win. Intrade state-by-state wagering gave Obama at least 281 electoral votes, 11 more than he needs to regain the presidency.
That level represents a late jump in bettor sentiment over the 55 percent to 45 percent average advantage the president held over Romney among Intrade betters through the summer. Obama’s chances peaked at 79.5 percent on Sept. 29, three weeks after the Democratic convention, according to Carl Wolfenden, Intrade’s exchange operations manager.
“He really broke out after the convention,” Wolfenden said in an interview.
Intrade’s Internet betting pool rivals, Betfair and IEM, are even more optimistic about the president’s prospects, putting the likelihood of his re-election at 77 percent and 75 percent respectively at about 5 p.m. yesterday.
One betting company isn’t waiting for all the votes to be counted to declare a winner. Paddy Power Plc, Ireland’s largest bookmaker, said it would pay out for an Obama victory. The Dublin-based company said it was paying out more than 500,000 euros ($640,000) on Obama bets.
“Paddy Power believes it’s a done deal and Obama is a nailed-on certainty to win a second term,” the company said in a statement on its website.
With the exception of Florida, the electoral map shown by wagering at Dublin-based Intrade hews close to the results from aggregated polling data at Pollster.com.
Polls of Florida voters gave Romney a narrow lead of one percentage point or less since early October. Intrade bettors are much more confident, placing the state a “solid Republican” or “leaning Republican,” with Romney given a 71 percent chance of carrying the Sunshine State.
Romney’s chances among Intrade bettors peaked at 48.5 percent on Oct. 24, five days before Hurricane Sandy struck the U.S eastern seaboard.
Nate Silver, author the FiveThirtyEight blog published by the New York Times, is even more bullish about Obama than the electronic betting markets. His analysis of polling data puts the likelihood of an Obama win at 86.3 percent, and predicts that the president will collect 307 electoral votes.
Intrade and Silver both gained prominence in 2008 by offering predictions that closely mirrored the eventual result. Intrade bettors said Obama would win 364 electoral votes, one fewer than he actually received in his campaign against Republican challenger John McCain. Silver’s poll analysis correctly predicted outcomes in 49 of the 50 states, missing Obama’s win of Indiana.
Intrade first offered a presidential wagering market for the George W. Bush-John Kerry contest in 2004. Its subscribers correctly predicted the winner of all 50 states.
“That was what really put us on the map,” Wolfenden said.
Intrade allows users to place bets on hundreds of political and other events which are presented as yes-or-no questions.
Share price is determined by cumulative betting. Winners receive $10 per share while losers receive zero. The site charges members a monthly fee of $4.99 per account to enter the betting pool.
Intrade trading volume for the 2004 presidential election was 1.3 million shares. That increased to 4.9 million shares for the 2008 campaign and to 11.1 million shares for this year’s election, through the close of business on Nov. 4, according to Wolfenden.
The big increase in volume this year was unexpected because the race wasn’t perceived as close for much of the campaign and “a close election is good for business,” Wolfenden said. “We expected volume increase, but not to double, nearly triple.”