Wednesday, November 7, 2012

Bettors Predicted Obama Win


All day yesterday and into the evening, the political experts said the U.S. presidential election was too close to call. The world’s bettors were saying something else. According to Intrade.com, where people use real money to buy and sell shares to predict events, Obama was favored 2:1 at 5 p.m. the day before the election.

Intrade is a prediction market, an auction market where people buy and sell shares in future events.  Many economists believe prediction markets are  more accurate predictors of future events than those of political experts because buyers and sellers are rewarded, or punished, financially according to the accuracy of their predictions.

Obama’s chances at Intrade peaked at 79.5 percent on Sept. 29, three weeks after the Democratic convention.

Throughout the campaign, whenever someone asked me who I thought would win, I checked the other major futures market, Iowa Electronic Markets and at no point did it ever point to anything other than an Obama win and it was never close. 

Paddy Power Plc (PAP), Ireland’s largest bookmaker, did not wait for election day and said it would pay out for an Obama victory two days before the election. 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 on November 4th, 2012.