2022 Midterm Election Betting Update: The bettors favor Red Wave, but they always do

Elections & Politics

2022 Midterm Election Betting Update: The bettors favor Red Wave, but they always do

Who do you believe: The polls or the odds? That’s the big question ahead of tonight’s results.

By Collin Sherwin@CollinSherwin Nov 8, 2022, 10:16am PST

"The 2022 Midterm Election is a gamblers paradise for a particular type of person.

If you’re as excited about the White House Correspondents’ Dinner as you are the Super Bowl annually, tonight is your biennial … Super Bowl. And just like in Las Vegas for the NFL Championship, there will be plenty of proposition wagering available.

Betting is as much a part of elections for as long as people have gambled in an organized fashion. You could cast a ballot and then place a wager on the outcome in Italy even in the 16th Century, and wagering on outcomes in Britain’s House of Commons is a practice from the 1700’s until today.

And while most markets are a pretty good way to express value in everything from sports to hot dog eating contests or who will win an Oscar, that doesn’t mean the markets are always correct. And there’s probably nowhere more than that being the case than in election betting.

Nate Silver and FiveThirtyEight.com gives Adam Laxalt a 51 in 100 chance of winning tonight’s Senate seat in Nevada. But the bettors at Polymarket have Laxalt at 70% to flip Nevada red. The spread is even bigger at PredictIt, who has him at .71 to take it home at 12:30 p.m. on Election Day.

In Pennsylvania, Mehmet Oz holds a 57% chance at 538 of beating John Fetterman, but is a 59% favorite at PolyMarket, and an even bigger .65 at PredictIt. These are just two examples of the larger narrative, which is that betting markets have continued to oversample Republicans for the last several cycles.

The most extreme example came during the election returns in 2020, where Donald Trump was -385 favorite to become President of the United States, and even higher than that in some places during the count of returns. Even when the electoral college math was clearly in favor of Joe Biden, the odds were still pointing towards a second term of Donald Trump.

It got so out of whack, we said this during our liveblog in 2020:

There’s only three possibilities here:

The markets think Biden loses Pennsylvania and either Michigan or Wisconsin.

They believe something will happen in the courts to deny Joe Biden the Presidency.

They’re just completely irrational.

It turned out to be some combination of No. 2 and No. 3 it appears.

The reasons for this aren’t totally known, although Alex Kirshner at Slate took a shot at trying to find a theory of the case in December of 2020.. There are plenty of opinions out there, but for at least the fourth-straight cycle it appears the betting markets are still slanting towards the Republican Party.

It could be the limited size of these markets, as getting down a bet of more than $1,000 can often be challenging. Or it could be that conservative voters, who tend to be more male, are also more active gamblers. But whatever the reason, betting on Republicans tonight is often not a sound strategy strictly from a value perspective.

So sit back and enjoy the election results as they come in tonight, and feel free to do some handicapping while watching the network coverage. But if you think the Red Wave is coming, you simply won’t get paid on it nearly as well as someone that disagrees with you."