Betting on “Vibes” – why the betting markets completely misunderstand the choice

In the betting markets, Donald Trump's chance of winning Tuesday's election is currently around 62 percent. This has changed significantly in the last few months since Kamala Harris became the presumptive nominee.

Now you will hear from experts and experienced election experts that the betting markets are never wrong. And usually they aren't. But anyone who has ever played in a casino or knows the statistics behind it knows that the house always wins.

I've heard the everyday bettor, the pundit and the extremely knowledgeable newscaster say, 'What do the betting markets know that we don't?' It has to be something.”

Well, I have news for you – it’s a load of nonsense.

Do you really believe that there are special proprietary surveys in the betting markets that the candidates themselves do not have access to? I mean, why is the probability of the winner not being inaugurated on January 20th at around 5 or 6 percent in the betting markets? (Don't get too excited, Tim and JD!) While this is pretty crazy, it's not based on any particular inside information.

The same goes for predictions that Trump will win. Because you need to understand what drives these betting markets – the bettors. They're betting on nothing more substantial than the “vibes” that made Harris' victory seem inevitable earlier this summer.

The groups that are placing hundreds of millions of dollars in bets behind Trump, which in turn are pushing markets toward his victory, are using their own models that actually rely not so much on polls but rather on the way social media influences the candidates treat . They track things like comments, engagement around posts, and reach, especially in contested states. But there's a problem with this kind of social media vibe – someone controls it.

If you're building a new model that predicts who will win in the future, the best way to test it is to use the same social media information from a previous election (2020), input the same data, and see as who it predicts the winner. When these modelers did this with their model, it supposedly correctly predicted that President Biden would win. Now, when they feed all the new social media data (engagements, likes, comments, etc.) into the model to predict who will win in 2024, it predicts Donald Trump… a lot. Otherwise they wouldn't bet $100 million on it. But there is a major flaw in their system.

We know that Twitter and Facebook interfered in the election by suppressing documents and information that would have been damaging to Joe Biden – think Hunter Biden's laptop, the lack of scientific basis for COVID-19 restrictions, and everything in between. It's not really a stretch to think that Republican speech has been suppressed in other ways on other social media platforms.

But since the last presidential election, there has been a profound change in social media. Elon Musk, a strong supporter of free speech, took control of Twitter/X in 2022, and as for Facebook, the discovery of his cover-ups this time has certainly cast a much harsher light on Facebook.

What does it all mean? This means that the betting models predicting a Trump win based on social media engagement “vibes” may not be seeing an increase in Republican and Trump sentiment so much as a change in the social media ecosystem. The model assumes that social media is exploding for Trump, but in reality it just sees more of the engagement that was suppressed the last time Trump lost.

To put the icing on the cake: Would anyone really trust Musk to unload the Twitter algorithm to show more pro-Trump material in the run-up to the election?

If that's not enough to dissuade you from betting, let me add this: In 2016, Hillary Clinton was the 88 percent favorite to win on the Sunday before the election. If you had the bright idea of ​​betting your entire savings on the easy favorite in the hopes of making quick money, you've lost everything.

My gut feeling still tells me that Trump will pull off one of the greatest comebacks in political history and win. But the betting markets and the gamblers who bet hundreds of millions of dollars on Trump could lose their shirts.

Liberty Vittert is a professor of data science at Washington University in St. Louis and resident on-air statistician at NewsNation, a sister company of The Hill.

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