US Election Betting opportunity
This US election betting strategy focus’s on the Republican nominee. While it is almost certain that Donald Trump will get the largest number of delegates based on the Primary votes, that does not necessarily translate to him becoming the automatic Republican Nominee come Convention time.
To illustrate, let me put four questions to you.
(a) How likely is Trump not going to get enough delegates for outright win (i.e. 1237 delegates) and (b) assuming he doesn’t and we move into Contested Convention territory, how likely are the Delegates to go against the Primary vote, and instead align themselves for a candidate other than Trump, (c) how does that relate to the betting odds, (d) and does that present a betting opportunity?
To answer the easy question first ie (d) as of time of writing the best odds available for Republican nominee are 8/15 via Betfair for Trump, 3/1 for Cruz and Kasich is the outsider at 16/1.
Researching question (a) it would appear that it is far from certain Trump will get enough delegates. In fact it is probably that he will not, and we will have a Contested Convention. Looking at the latest betting odds, Betfair are offering 1/3 that there will be a contested convention so the markets clearly believe that is likely to happen.
Turning to question (b) it is very complicated. One key aspect that needs to be taken into account is that the delegates chosen to represent each state at the Convention are not part of the ‘Washington establishment’ but rather in the main are ‘grassroots’ activists, and it has been shown that on balance these activists do not want Trump but instead overwhelmingly favour Cruz as their next president.
To this point, see below interesting article by Nate Silver that backs the theory that if there were a Contested Convention, Trump will lose.
Turning to question (d) this tells me there is an opportunity. I don’t believe the current market price fully takes into account the likelihood of our going to a Contested Convention and in turn the likelihood that if we do go to a Contested Convention that it will heavily favour Cruz over Trump. As that becomes more apparent I see at the very least Trump’s odds drifting out and other candidates drifting in, including potentially a dark horse candidate inserted by the Republican grandees.
Which is why I believe if we get to the point where a contested convention is looking certain or even very likely, the betting odds will switch with Trump moving to odds against instead of the current odds on.
My recommendation at this point would therefore be to go onto one of the betting exchanges (eg Betfair Exchange) and lay Trump. As those odds drift out, you can then either close out the bet for a profit, or if you are confident that the Contested Convention will result in Trump not being the Republican nominee, you can ride it out and take the full profit from your bet.
There are no guarantees that this strategy will work, but I believe that the potential upside outweighs the downside risk, and it is a play worth making (and I have already put my money where my mouth is and put on a sizable bet as per above strategy).
I will keep a close eye on how it works out and the betting market moves, and keep everyone up to date.