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Your 2020 Election betting primer

There’s five days where we’ll determine the fate of the free world, and there’s no time like the present to cash in on the upcoming election.

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Democratic presidential nominee Joe Biden speaks during a virtual town hall event with Oprah Winfrey at The Queen theater on October 28, 2020 in Wilmington, Delaware. Photo by Drew Angerer/Getty Images

There are hundreds of ways and outlets to bet on the upcoming election, Betting on the upcoming 2020 election is pretty simple:

If you believe the polls, you have no choice but to put your money on Joe Biden. If you think the polls are wrong, there is a value to be had on Donald Trump. And even if you’re not sure either way, there are still plenty of ways to make money on this election with a bit of international trading experience.

The differences in the data and the markets related to the 2020 election are massive.

But before you start firing some bankroll on the people that will eventually determine your tax liability if you win, you need to account for a few things that might be a bit counterintuitive.

The polls in 2016 weren’t actually that inaccurate

A lot of conventional wisdom, post-game analysis, and some flawless hindsight points to biased polling as the reason why Hillary Clinton will be an electoral college member instead of a President this December. But in reality the polls in 2016 were just as accurate as they have been in previous elections.

It’s just the states where Trump outperformed expectations matched perfectly with where he needed to win more votes, specifically in states like Wisconsin, Michigan, and Pennsylvania. He had to thread the needle, and he did.

Combine that with the letter from FBI Director James Comey saying they found a laptop with information from Hillary Clinton (that turned out not to be on said laptop), and late-breaking voters came on at the last minute in favor of Trump at a much higher rate.

FiveThirtyEight.com gave Trump a 29% chance of winning on Election Day, so him doing was a small upset, but certainly not a huge surprise.

The polls in 2020 are nowhere near as close as the odds

There were two highly-credible polls, each issued with two different statistical models based on turnout, issued yesterday for the state of Wisconsin. One was by ABC News & The Washington Post, and one was by Marquette Law School. Both the ABC/WP likely voter model and a registered voter model, considered gold standard polling in modern American politics, had Joe Biden leading by 17 points in the Badger State. The Marquette poll had Biden leading by five points with likely voters, and four points amongst registered voters.

No major credible poll has had Trump leading since the third week in June. The Trump campaign gave up millions of TV advertising reservations in the state because it’s been basically conceded to the former Vice President, despite a Trump rally being held there two days ago. With 1.6 million Wisconsinites having voted already, and 81% of requested mail ballots returned, it seems this race is over.

So why can you buy shares of Joe Biden to win Wisconsin for just .71 on the dollar at PredictIt?

It’s clearly a massive market inefficiency if you believe the polling data. At Betfair, a market-based betting site not open to US-based customers, Joe Biden is the equivalent of a -588 favorite to win, with Trump the equivalent of +350.

In fact if you wagered $100 at PredictIt on Trump to win at +350 at BetFair, and bought $263.28 worth of shares at PredictIt of Biden at .71, you’d be guaranteed a profit $86.72 when the election is over in a full arbitrage opportunity. Which means literally go do this right now if you’ve got dual citizenship or friends you trust abroad, as that’s enough to cover any fees for both transactions.

And Wisconsin is just one example, as there are plenty of other states and outcomes where this is available.

American markets are favoring Trump heavily, while the rest of the world is on Biden

PredictIt mostly caters to a domestic audience, with an exemption in the law from the Commodity Futures Trading Commission because the data collected is used in political science research. Each user is also capped with $850 as the maximum position they can take on any single question.

It means that the markets at PredictIt and at Iowa Electronic Markets, a similar site also with an exemption, tend to have more small traders and a bias towards US residents. That seems to be part of the reason for the massive differences in markets here.

How can I bet on the election?

If you’re thinking of jumping into these markets, PredictIt does accept major US credit cards with no fee. However, there is a 5% fee on all withdrawals up to the amount taken out of your account. They also tag all winning trades only with a 10% surcharge that isn’t paid if you lose money in any transaction. Unless you live in Europe, this is your only opportunity to legally wager on the 2020 election.

You can win without putting up any money!

If posting your own cash on the election isn’t for you, you can still be a winner as part of DraftKings Sportsbook $100,000 Presidential Election Pool. Pick who becomes the next President of the United States, as well as the winner of 11 specific states, and you’ll win your share of $100,000!

This election is a big deal. And not just to determine who will run the country, but potentially for your winning as a wagerer in 2020 too.