What are the betting markets telling us?

Today saw a huge swing against Trump in the betting markets. Why?

You might say, “duh”, he got Covid-19. But when Boris Johnson got Covid-19 his popularity increased slightly, even though he was also a politician who was accused of not taking the problem seriously enough.

Yes, the swing in the betting markets likely reflected today’s Trump news, but I still believe we need an explanation as to why it had this effect. He’s 95% likely to recover, maybe more as he seems like a healthy 74-year old.

One possibility is that the problem isn’t the Covid-19 itself, it’s the likelihood that this will crowd out other issues. Now this issue seems likely to dominate the final month of the campaign, especially as there are all sorts of questions that will be discussed, such as who came in contact with top White House officials and why weren’t certain protocols followed.

More importantly, if this issue dominates the final stretch of the campaign, then other potential Trump friendly issues (like “law and order” or the rising stock market) won’t dominate. Trump will be forced to run in a period dominated by an issue he’d rather avoid. Even worse, there’s a slight uptick in cases in the US, suggesting the Covid-19 problem will remain severe throughout October. It won’t “magically” vanish.

Also, Trump likes to seem more vigorous that Biden. Perhaps this weakens that argument.

Maybe the two week quarantine eliminates the next debate, giving Trump less opportunity to make up ground.

Or maybe this news will highlight the way Trump discouraged the use of masks at various times.

I probably look at things too rationally, and hence am the last person anyone should trust on political issues. I’d be interested in what you think.



41 Responses to “What are the betting markets telling us?”

  1. Gravatar of Michael Sandifer Michael Sandifer
    2. October 2020 at 21:47

    My thinking is that Trump may have gone to the hospital today, because he has an additional risk factor that hasn’t been disclosed, such as a heart problem, or perhaps he had a mini stroke the last time he was taken to Walter Reed. The latter would make him vulnerable to blood clots. But, this betting market doesn’t seem to assign a high probability to Trump dying, or becoming permanently incapacitated.

    Much of your speculation seems plausible. Being behind, every day Trump loses hurts a great deal, especially in light of historic early voting.

    However, the stock market has not done well over the past 30 days, being down over 6%, and as you mention, new pandemic cases are again on the rise.

    We live in crazy times, but the argument that Trump will win has been getting weaker by the day since Tuesday night.

  2. Gravatar of Russ Abbott Russ Abbott
    2. October 2020 at 22:08

    Seems to me you are right about what’s going on.

  3. Gravatar of Cartesian Theatics Cartesian Theatics
    2. October 2020 at 23:16

    He does have a heart condition and there are rumors that he’s in serious condition. It seems unlikely he’ll be able to “bounce back” quickly, which doesn’t play well. There’s also something about the president getting it that may cause a legitimate change of heart about covid and a rethinking of our whole response–that “dose of reality” factor. Also, Trump can’t really be a dick to Biden anymore. It’ll be weird if he gets back on the stage and starts attacking him again. The tone change might favor Biden. Tactically it’s a difficult position for Trump. On the flip side, I wouldn’t be surprised if he pulls off some brilliant comeback message.

  4. Gravatar of David S David S
    2. October 2020 at 23:18

    On Monday I remember being irritated by the NY Times article on Trump’s taxes. On Wednesday I had a conversation with a friend about how the media had gotten duped by Trump’s debate performance. On Friday….
    If aliens land on Earth on Monday they will get upstaged by Trump.

    Scott, how’s that Howard Hughes gig working for you? I recommend watching Mystery Men and then binge watching The Boys.

  5. Gravatar of Andrew M Andrew M
    2. October 2020 at 23:28

    You’re all way overthinking this. A huge part of Trump’s appeal is his tough guy image. Suddenly the veil has fallen: they’ve realised that their God is mortal after all. They won’t switch votes to Biden, but they will just stay home and not vote at all.

  6. Gravatar of Todd Kreider Todd Kreider
    3. October 2020 at 01:39

    Scott wrote: “Even worse, there’s a slight uptick in cases in the US, suggesting the Covid-19 problem will remain severe throughout October. It won’t “magically” vanish.”

    Cases don’t say anything interesting now because they many are different than those detected in spring when a very high percentage of cases were of people who were symptomatic, whereas since August not only has the testing continued to increase but a large percentage have been of asymptomatic students. Often the tests are so sensitive that they are only detecting strands of RNA so the vast majority can’t be spreaders. You probably read about this in the NY Times in August.

    Over the past seven days, the increase in Covid-19 deaths in the U.S. has reached a low of 0.3% per day, down from an increase of 0.9% per day the first week of September, and this should continue to decline unless a second wave begins sometime in November.

    U.S. increase in deaths per day:

    First week of April, 20%
    First week of May, 2.9%
    First week of June, 0.8%
    First week of July, 0.7%
    First week of August, 0.7%
    First week of September, 0.9%
    First week of October, 0.3%

  7. Gravatar of tpeach tpeach
    3. October 2020 at 01:54

    I don’t get why the betting markets give Hillary a higher chance of winning than Kamala Harris or Mike Pence?

  8. Gravatar of Benjamin Cole Benjamin Cole
    3. October 2020 at 02:32

    Trump’s performance at the debates was dreadful, by any metric.

    More than 73 million people watched the debates.

  9. Gravatar of Smo Smo
    3. October 2020 at 04:23

    I think there’s multiple things going on here which makes election betting odds a poor place to figure out what’s going on.

    1/ Betfair is now suspended. I assume that means election betting odds is taking prices from FTX only (which is already bad, since it doesn’t seem to see anything like the volumes posted on Betfair). (And if they’re not, are they taking the “last traded price” on betfair, which would be even worse, as it seems people traded all the way down to 25% at the last possible moment before Betfair suspended the market).

    2/ Looking at only the Trump odds. Your blog only really references the Trump odds, but if bettors were seeing a big move in the odds of the election (as in DEM vs REP) we’d see the equivalent swing in Biden’s odds. If we look at the moves over the last week we see Biden is up quite a bit, but all of that move was pre-Trump COVID news. The Trump news has left Biden’s odds roughly flat. (https://electionbettingodds.com/President2020.html#chart)

    If I’ve learnt anything from the last week, it’s that the market thought the debate was a considerably bigger deal than Trump getting COVID. (Which staggers me)

  10. Gravatar of Mark Mark
    3. October 2020 at 04:35

    I think there’s a difference between catching COVID at the beginning when there were a lot of unknowns and people would have seen it as a random tragedy and rallied around versus nine months in after being repeatedly criticized for failing to take consensus precautions such as wearing masks and refraining from having large in-person events; then it starts to feel like the result of his own actions.

  11. Gravatar of Skeptical Skeptical
    3. October 2020 at 04:58

    The simplest explanation is that it essentially freezes the race. The only plausible reason for the markets to give Trump a ~40% chance is that each day that remains has a Prob(game changer). And hey, it is 2020.

    Enough days in the race with active campaigning and [1-Prob(game changer)]^(days remaining) and you start to see a fair amount of uncertainty for Biden. However each day that passes makes that less likely.

    If Corona-chan freezes the race for two to three weeks with POTUS at Walter Reed then that fundamentally removes weeks of time from the probability calculation

  12. Gravatar of Njnnja Njnnja
    3. October 2020 at 05:44

    It could also be that the large number of republican officials and aides with COVID (relative to dems) turns the republican platform into the functional equivalent of pro-COVID. “How can they take care of me when they can’t even take care of themselves?”

  13. Gravatar of Patrick Patrick
    3. October 2020 at 05:49

    I agree with what Cartesian Theatrics and Skeptical suggested, but I think Scott is underestimating Trump’s probability of death. If it’s 5% conditional on infection, it’s even higher conditional on showing symptoms (twice as high if asymptomatic cases are 50%). Conditional on going to Walter Reed, you might further upgrade the probability.

  14. Gravatar of PG PG
    3. October 2020 at 06:37

    The simplest explanation is that Trump’s chance of death or debilitating illness before the inauguration has increased. (Pence’s chance went up only 1%, but many Trump voters are not Pence voters.)

  15. Gravatar of Carl Carl
    3. October 2020 at 07:19

    It’s hard to seem like a caudillo when you’re in a hospital bed.

  16. Gravatar of Cameron Cameron
    3. October 2020 at 07:20

    Betfair suspended their presidential market when Trump was diagnosed. Since electionbettingodds.com was combining that and ftx.com that probably disrupts the continuity of odds.

    I have no clue why Clinton is at 1.8%…

    It SHOULD be damning that 2 days after criticizing Biden for wearing masks and social distancing the WH has numerous cases. The real question is why Trump still has a ~1/3 chance to win given his standing in the polls, his inconsistency on COVID-19, and his unpopularity.

    It is worth remembering McCain was at 35% around this time in 2008 and I never thought he had a serious chance. This was a bit before the bottom fell out of the economy, but the fundamentals were so bad for republicans I would have put the odds at more like 10-20%. After the the stock market crashed mid October his odds fell to about 20%, still surprisingly high. Betting markets seem pretty conservative until just before the election. If nothing changes Biden will probably continue to gain about 1% every couple days.

  17. Gravatar of Cameron Cameron
    3. October 2020 at 07:32

    It looks like on FTX and PredictIt Trump has a 37% chance to win. Not sure where electionbettingodds.com is getting their probabilities at this point.

  18. Gravatar of Michael Rulle Michael Rulle
    3. October 2020 at 08:15

    In my opinion, this is a disaster for Trump. It does not mean it cannot change. We have already forgot about Proud Boys—-which is kind of remarkable. While the Trump administration has been a non-stop series of “blockbusters” , we forget them quickly and move on to the next one.

    This seems different. Even if he sets a world record in speed of recovery, this is a storyline that will be hard to disappear——although nothing is ever certain—-for example—-I am not with Moore’s conspiracy theory——but his interpretation of a quick Trump recovery may be accurate. When we peak out the window from Howard Hughes land, it is like a kaleidoscope. It just keeps changing rapidly.

    I think we know why Biden was hiden (🙂). They did not want him to get it. Ironically, he is in public a bit more.

    Interesting stats on virus:

    I won’t waste time on showing calculations——if anyone is really interested I will do it. Excess deaths is a great starting point as it in theory incorporates all factors including shutdowns. CDC has excess deaths at 9%. From what I can tell from CDC site, this 9% number is approximately the same among all age groups (not the very young). It may be 12 or 8 etc, but it is pretty close to the same.

    For example, whatever the baseline probability of all caused deaths for a particular age group, excess deaths (defined as above average of last 5 years) tends to be 9% higher in each group.

    I went on one of the many “death sites” to see what I could extract. I chose a 50 year old male. A 50 year old male has a 1/265 chance of dying over the next 12 months from all causes. When you add “excess deaths” it increases to 1/243. Or an increase of ..35/1000

    What would a 50 year old need to be paid to take that extra risk. The illusion is ignoring the baseline. The baseline seems high—-but the increase is the point. I won’t say it is diminimus—-that is subjective—-but it creates a decent heuristic.

    We don’t know what no shutdown would have been. Certainly higher—-but how much. We really don’t know. But no one “cared” in 1968. Was that good? Subjective again

    But my point is that given what we have done, while absolute numbers are higher, the incremental risk of death for any single individual is small.

    An observation—-no solutions offered

  19. Gravatar of Mark Z Mark Z
    3. October 2020 at 08:37

    I think you overlook one explanation, that it will hobble Trump’s ability to campaign for the last month of the race. No more rallies, floor example, and giving video messages from a hospital bed is probably bad optics.

    No offense regarding your rationality, but on matters of Trump, ‘rational,’ isn’t a word I’d use describe your temperament, you’re clearly affected by your emotions on that topic. That goes for most people of course, but when I see a themoneyillusion post is going to be about popular politics, I immediately know I’m probably about to get Rachel Maddow rather than Scott Alexander.

  20. Gravatar of Sean Sean
    3. October 2020 at 08:40

    Alternative – Trump is healthy in a week – Covid fails to kill a fat 74 year old – which then make Americans care less about spreading the virus. They vote against Biden as voting for Biden is a vote for potential lockdowns and restrictions.

  21. Gravatar of ssumner ssumner
    3. October 2020 at 08:45

    Todd, If you had read the link you could have posted a more insightful comment.

    tpeach. Assume the figures are plus or minus 2%, due to market illiquidity. Hillary’s numbers are then not statistically significant.

  22. Gravatar of Michael Sandifer Michael Sandifer
    3. October 2020 at 12:35

    Following the confusion among White House Press Corp. reporters on Twitter today may support my point about Trump having an undisclosed risk factor concerning Covid-19. Statements by his doctor were contradicted by Chief of Staff Meadows, immediately following those statements. Meadows indicated that the next 24-48 hours could be critical in Trump’s treatment.

    It doesn’t take a genius to guess that Trump’s last trip to Walter Reed, in the middle of the night, was probably not for something minor or routine.

  23. Gravatar of Nathan Taylor Nathan Taylor
    3. October 2020 at 14:11

    I’ve noticed the market you’ve cited

    tends to move more on news compared to predictit

    which in turn moves more on news than betfair (by far the most liquid market). Which unfortunately shut down their presidential market after covid trump announcement.

    I noticed this because what happened in August. Checking a bit…., and yeah, electionbettingodds in August moved from 59.7 Biden on August 1 to 51.4 Biden on August 31. I had assumed that move was driven by looting news gaining traction. But…polls never reflected this, other markets like predictit didn’t move as much. eg, predictit went from 61 Biden to 58 Biden. Down 3 points, not 8. Betfair I recall was more stable still, maybe moving 1 or at most 2 points. But unfortunately that’s now offline so can’t check. My guess is that electionbettingodds is illiquid enough that some people game that market on short term news, so it tends to overreact to every story.

    Looking at predictit. Biden 58 on Monday, Sep 28 before debate. Biden 62 Wednesday. So call that the debate bump, and now 64. So debate slightly larger impact than Covid for Trump. But, now that I’m checking closely, seems like you are correct about Trump. Trump down way more than Biden up. Trump 43 after debate, and now 37. So….barring betfair data I guess I walk this back a bit. Seems like Biden gain could be explained by just making Covid the core topic of the election gains him a couple of points. Since Covid is worse focus of election for him than supreme court nominee battle.

    Anyway, I guess my main point here is electionbettingodds seems worse than predictit, so helps to wait a day or two for whoever is goofing around to make their play. And yes, Biden was at 64 when you posted this on electionbettingodds, but now he’s at 59. Which is a lot more reasonable.

    So I think Biden gaining a couple of points on Trump covid plausible. But I agree Trump himself dropping so much on the covid news does seem odd. And that gain went to Pence. Given the market thinness, I think waiting a couple more days is probably the most sensible before reading too much into the Trump drop. We’ll know soon exactly how sick he really is, and then it might become more clear what’s going on.

    Bummer that betfair pulled the most liquid betting market.

  24. Gravatar of Nathan Taylor Nathan Taylor
    3. October 2020 at 18:22

    Ok. Wasting time on twitter, I did see one suggestion on how betting market shift might make sense. Trump has built a white house where every single thing must come from him. And one where the default is to lie, in particular about Trump’s health.

    So it’s not about him recovering, which statistically seems likely.

    What this means is complete paralysis of his campaign for re-election. And lies about his health which will be exposed. And this will dominate the final news cycle now until election day.

  25. Gravatar of Michael Sandifer Michael Sandifer
    3. October 2020 at 18:29

    Yes, one reason the statistical likelihood of Trump’s recovery is considered high is because, according to some medical professionals who’ve treated Covid-19 patients for months, treatments have improved substantially since February.

  26. Gravatar of anon anon
    3. October 2020 at 19:21

    Michael Rulle – your focus is only on increased death risk ignoring other health complications one could be suffering through the rest of the life if they are not dead. Obviously what those are not clear today but will become well known in 6-12 months as those survivors, posit only 10%, complain about new issues. Now what is the calculation for that – either debilitating or just run of the mill discomforts?

    As for Trump campaign: are we forgetting that we are in digital world where Trump can fire willy nilly his messages in twitter? Putting him and wife in quarantine isn’t stopping his campaign or his appeal to his base. As for the swing voters, whats the big deal – can’t he participate in a debate remotely; can’t he release video message – its but natural state of affairs for the born digital natives which those that were born in analog world and coming into digital have a tough time even comprehending!

  27. Gravatar of Michael Rulle Michael Rulle
    4. October 2020 at 05:34

    Anon—-yes on “health complications”. Agreed. For some reason this does not get emphasized. Perhaps it’s not that severe—-but don’t know. I was just trying to make a narrow point. That narrow point is we are 11 times more likely to die from something else, which itself is low——yet our minds are hypnotized by one thing. Why? For some reason we believe we can avoid it but politicians prevent it. We can avoid it to some degree, but it’s not cost free. just like we can avoid cancer with earlier treatment, or car deaths by driving safely etc——but in the end we cannot make it zero.

    I find the “blaming of politicians”—-even in the horror show which was N.Y. and NJ ——truly scapegoating. It’s a damn plague. It is not a political policy. And if you want to believe masks will save you by all means wear them—-but they did not save New Yorkers——but I wear them.

    So now Trump “gets what he deserves”. And I know people believe that. It is sick and stupid.

    What is even worse, is that the nation and media still do not know the difference between contracting the infection and contracting the disease. It is more like HIV versus AIDS—by analogy. One is the infection, the other is the disease. AIDS has a 100% death rate. HIV obviously does not. What is COVID’s death rate versus the infection? It’s actually a continuum. We don’t really know the answer.But the great majority is asympotomatic—-where death rates is zero.

  28. Gravatar of Alabamian Alabamian
    4. October 2020 at 06:29

    Kayfabe is difficult to maintain when there are undeniable real world ramifications.

    Trump’s presidency is built on performative exhibition. Both he and [most, but certainly not all, of] his followers are “in on it.” The advice to “take Trump seriously, but not literally” is good. It’s not about the literal truth of the things he says or the positions he takes. It never has been.

    The performance becomes more difficult to justify as it is shown to have worse and worse negative real world effects.

  29. Gravatar of bill bill
    4. October 2020 at 06:35

    I’ll take Pelosi at those “infinity” odds.

  30. Gravatar of Todd Kreider Todd Kreider
    4. October 2020 at 07:12

    “Todd, If you had read the link you could have posted a more insightful comment.”

    I read the link before commenting. What was your issue with my comment?
    What I wrote was accurate and clear.

  31. Gravatar of Todd Kreider Todd Kreider
    4. October 2020 at 07:21

    “It’s a damn plague.”

    It seems like 5% understand this. At times I’ve just said: “It’s a _virus_” or “It’s a _pandemic_” but that doesn’t resonate.

  32. Gravatar of Christian List Christian List
    4. October 2020 at 07:35



    Today it’s over -6% for Biden and over +3% for Trump. Maybe there is a small rebound.

    I think you have already named all the main points. He has always been considered an invulnerable tough guy by his voters. This image might receive some damage, if he does not come back really fast. And his campaign is crippled for now. The TV duels might be gone as well, at least one of them, but since he is now failing in TV duels as well, this might be not too bad for him.

    Trump is really unlucky this year, it’s a perfect storm against him, it’s kind of mindblowing, but one does not have to feel sorry for him, he caused most of the outcomes himself.

    There are many leaders who have been given a boost in popularity by this crisis. Crises of this kind can often be good for a government. One can name 9-11 as an example, even though the authorities failed there as well, Bush still gained. Trump did not use this crisis in his favor at all, the opposite is true, he has failed.

    Nevertheless there is still a small last mini-out for him. The current mutation of the virus could be less pathogenic than in the beginning. He could be fit again quite quickly. So far he might not even have serious symptoms. That’s his last out: Rising from the dead in a few days, in the spirit of Jesus Christ, untouchable, invulnerable, unbreakable, nothing can harm or stop him. His followers would probably love the story.


  33. Gravatar of ssumner ssumner
    4. October 2020 at 07:53

    Todd, Hospitalizations have turned slightly higher. That doesn’t bode well for the future.

    Michael, You said:

    “So now Trump “gets what he deserves”. And I know people believe that. It is sick and stupid.”

    What he “deserves” is to lose the election. It’s not complicated.

  34. Gravatar of Scott H. Scott H.
    4. October 2020 at 08:09

    The odds getting longer makes total sense to me. Trump’s comeback options are becoming more limited. The wild card question is “does Trump’s condition reduce the fervor of either side in some incongruous manner?” I would think that would only be the case if he doesn’t really recover in the next couple of weeks.

  35. Gravatar of Todd Kreider Todd Kreider
    4. October 2020 at 13:06

    “Todd, Hospitalizations have turned slightly higher. That doesn’t bode well for the future.”

    The graph Yglesias put up ends in early September with that uptick but hospitalizations then went down:

    Covid-19 Hospitalization rate:

    Week ending Apr 4: 1.4%
    Week ending May 2: 2.7%
    Week ending May 23:3.3% (peak)
    Week ending Jun 6: 2.2%
    Week ending Jul 4: 0.90%
    Week ending Aug 1: 0.88%
    Week ending Sep 5: 0.77%
    Week ending Sep 12: 0.81% (uptick)
    Week ending Sep 19: 0.77%
    Week ending Sep 26: 0.76%


  36. Gravatar of Thiago Ribeiro Thiago Ribeiro
    5. October 2020 at 04:51

    Clinton ahead Pence and Harris. Why?! Is she plotting a coup?

  37. Gravatar of Bob Bob
    5. October 2020 at 09:17

    The fact is that the lack of liquidity, and inability to place really large bets hinders the accuracy of the betting markets. In which universe is Clinton at 1.7% a good bet?

  38. Gravatar of Michael Sandifer Michael Sandifer
    5. October 2020 at 09:28

    Has anyone else noticed that when Republicans control the Presidency and the Congress, they always blow themselves up with incompetence and a total lack of integrity? And they get worse over time.

    The Democrats are so politically incompetent, they can’t get this message to the voters. Republicans, as the Party is now largely constituted, should never be trusted with anything again.

  39. Gravatar of Christian List Christian List
    5. October 2020 at 11:05

    They seem to be treating Trump with antibodies and dexamethasone. He now seems to think that he’s cured. This worries me a bit.

    I wouldn’t be surprised if he has a relevant relapse. This kind of “therapy” is predestined for a relapse, especially if you don’t allow yourself any recovery time like Trump does.

    If I were Biden, I would not enter into another debate with Trump. Trump does not follow hygiene rules and Biden, because of his age, is even more at risk than Trump.

  40. Gravatar of ssumner ssumner
    5. October 2020 at 14:37

    Todd, Look at current hospitalizations:


    The downtrend has clearly ended, although the uptick is small. We can expect another month of bad news, which was my point.

  41. Gravatar of Todd Kreider Todd Kreider
    6. October 2020 at 10:21


    Deaths keep falling according to the next graph. Also, you mentioned ‘cases’ in your post, which don’t give good information anymore. Hospitalization rates are fin but ICU rates are better.

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