Augur Weekly - Critical Moment for Impeachment Markets
A Look at the Week in Political Betting, Augur News, and More
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Political Betting Roundup
This week, the impeachment hearings for President Donald Trump’s inquiries into Joe Biden’s son in Ukraine, and the alleged quid-pro-quo, brings markets affected by its result into focus. Wednesday featured testimonies from William B. Taylor Jr., acting ambassador to Ukraine, and George Kent, deputy assistant secretary of state for European and Eurasian affairs. No smoking gun emerged from these initial testimonies, and the betting markets remained relatively unchanged; leaving bettors hoping to profit from a volatile soundbite wanting. Today features further testimony from former ambassador to Ukraine, Marie L. Yovanovitch.
As you can see in the above chart from Jim Bianco Research, the PredictIt odds for Congress passing an article of impeachment have been steadily trending upwards since the initial spike when Nancy Pelosi announced her inquiry (Currently 0.77/share). While odds are quite short, representing the market’s belief that the passing of at least one article of impeachment is inevitable, a dissenting thesis can earn ~3.3x on their money if correct.
Although the odds of impeachment are quite short, the odds of a Senate conviction remain long in contrast. Given GOP control of the senate, the betting public believes that would be a long shot (currently 0.17/share). Like the market on impeachment, a contrarian here stands to earn a substantial return, ~5.9x, for a correct prediction.
Elsewhere in political betting news, the markets for the Democratic nomination continue their week-over-week volatility. After making an initial splash with his announcement, Mike Bloomberg’s odds have fallen back to earth from 0.13/share to 0.06; while his theoretical competition for the moderate voting base, Pete Buttigieg (0.19/share) and Joe Biden (0.23/share), seemed to have regained their lost footing. What’s more, not only did this recovery put distance between Buttigieg/Biden and Bloomberg, but it also added some separation from Bernie Sanders and Andrew Yang, the owners of the fourth and fifth-best odds at 14c and 9c, respectively.
The most notable story in the Democratic nomination market, however, is Elizabeth Warren’s continued fall from bettors’ grace.
Warren’s early October odds painted her favorite status as a foregone conclusion. However, as we’ve noted here, sentiment this far out tends to be fickle. What’s also interesting to note, at this point, is the dichotomy between polls and markets. While a recent post (bonus: fun prediction market math discussion in the comment section, if that’s your thing) paints markets as being driven by poll sentiment, the divergence captured below suggests otherwise:
David’s right, Sportsbooks are certainly going to have disadvantageous odds and pricing relative to prediction markets. Couple that with the inability to exchange your position and it becomes clear that buying a ticket is the suboptimal route.
As a reminder, come Q1 2020, Augur will be the only platform for political betting with no limits, the lowest fees, and unbeatable odds.
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