This Is Either The Dumbest Or Smartest Thing We've Done
By Jason Ganz (Intro) and Sean McElwee (bets)
The political class is full of people who love to talk about how brilliantly they understand politics while missing just about every important story and trend. At Data for Progress, we believe that if think we can tell you about what can and should happen in politics, we should base that in an ability to read the political climate at least better than the market.
That’s why we decided to do an experiment. PredictIt is a site that allows you to bet on politics. So I offered Sean a challenge. A $500 donation to Data for Progress - but with a catch. The money had to go towards Data for Progress putting some skin in the game (a good concept, fuck Nassim Taleb though).
We wanted to do this for a few reasons. First off, we’re pretty sure we’re gonna walk out with extra money to spend on funding projects like The New Progressive Agenda and What The Hell Happened (you can support our work here). Second, it helped us sort out what we really thought was going to happen.
But mostly it’s because predictions are valuable tools for understanding the world. When we’re putting money and our reputation on an event, it gives us real stakes and makes us think rigorously about the future.
Keep in mind that in many cases, we’re making bets with think are less than likely, but we think that the markets are valued against where we would put them, so we can make a buck on the unexpected. We categorize the bets we expect to win and get a modest return as “toss-ups.” We also made some “Blue Wave” bets that would let us reap big rewards in a Blue Wave scenario.
We’ll be reporting back next week on how much we brought in and some takeaways from the overall project.
- Jason Ganz (@jasnonaz)
Note: For the numbers below, we’ve adjusted our expected returns to account for fees.
Bet 1: $125 on a Democratic House (Link)
PredictIt allows us to purchase shares worth $181 for our $125 bet. Normally, we like to make riskier bets with higher rewards, but in this case, we can get a 46 percent return over a period of nine days. Not bad. We think Democrats are heavily favored to take the House, based on continued generic ballot strength. To be honest, this is like taking candy from a baby.
Bet 1A: $25 on Pelosi speaker (Link)
This is basically another bet on the Democratic House, since Pelosi has all but assured to remain speaker if Democrats take the House. Still – wilder things have happened. If the House market weren’t so underpriced, we’d look for more arbitrage here, but for now, we’re making a small bet.
Bet 1B: $20 on House Turnover (Link)
If Democrats are picking up something up a decent number of seats, than we can be expected to top off on this market. Four intra-democratic primaries as well as several intra-party retirements will suffice to put us over the top.
Bet 2: $25 on McCaskill (MO-SEN)
McCaskill’s race is still a toss-up but we were able to buy at 37 cents, which we think was a bit low. Unions won a recent victory repealing right-to-work and Hawley’s closing message is a transparent lie about pre-existing conditions. We think it’s too early to write-off McCaskill, who has pulled off tight elections in the past. Our expected return is a cool 153 percent if she wins.
Bet 3: $20 on Donnelly (IN-SEN)
We think Donnelly is very slightly favored here, but markets have him narrowly underwater. That’s in reaction to recent polling, but we think Braun is a weak candidate who won’t seem qualified to voters. We’d double our money if we are correct.
Bet 4: $35 for Rosen (NV-SEN)
This market has Rosen narrowly underwater, but we think that the strength of the culinary union could push Rosen across the finish line. After 2016, we never read too much into early voting, but Ralston is the best in the business and we like what we’re seeing so far.
Bet 5: $40 on Sinema (AZ-SEN)
Kyrsten Sinema has had a few bad media weeks, but polling shows her close enough that we’re willing to bet on her. The polling makes this a tight race and we think Sinema can pull it out. The price of the shares is low enough that we can more than double our money if she does.
Bet 6: $10 on Tester (MT-SEN)
Tester is at 69 cents. How do we not make that extremely nice wager?
Senate: Blue Wave
Bet 7: $20 on O’Rourke (TX-SEN)
Beto isn’t the favorite, but for $20 we can get shares worth $92. In a wave environment, we think this seat is in play. We’re seeing a surge in Latinx turnout and Beto is finally turning negative. With $10 million cash on hand, he can get his final message to voters. Plus, Travis Scott endorsed him. If it’s a really fucking good night for Democrats, we’ll have nearly quintupled our money.
Bet 8: $35 on Abrams (GA-GOV)
We’re seeing strong black turnout in Georgia and the libertarian candidate could sap support from Kemp, whose extremism makes him a weak candidate. We think the markets are underestimating the chance that Abrams pulls this out, and we’d get a cool $95 for our wager if she does.
Bet 9: $40 on Cordray (OH-GOV)
Between the original writing and actually purchasing shares, the market here moved a bit in our direction. We’re not sure why the markets were so bearish on Cordray here until today. Much like Michigan, Wisconsin, Pennsylvania, Minnesota and Iowa, which all broke towards Trump in 2016, we think there will be a reversion towards the mean in Ohio. And Republican Mike DeWine is an extremist who is endangering their chances.
Bet 10: $15 on Kelly (KS-GOV)
Orman’s presence in this race is worrying, as the Independent could pull of Democratic voters. But Kobach is far-right candidate who’s unpopular even among Republican electors in the state. The continued and strong Democratic performances in House races make us bullish on this race. We’d double our money if she wins.
Governor: Blue Wave
Bet 11: $10 on Edmondson (OK-GOV)
We wanted to make a few bets that would pay off big if there was a surprise. Ideally, we’d be picking SD-Gov, but confusingly, PredictIt has no market for that (incredibly tight) race. We’d quadruple our money if the Democrats win and we think that’s a plausible outcome. After all, Democrats have performed well in down-ballot specials and the incumbent Republican, Mary Fallin, is the least popular governor in the country. This race would give us among our highest returns, quadrupling out money.
House Races - Toss-ups
Bet 12: $10 on McCready (NC-09)
McCready has been a powerful fundraiser and Republicans lost their incumbency advantage and ended up with an extremist anti-choice candidate in Mark Harris. We bought at 41 cents, despite the fact that ongoing Upshot/Siena polling shows this race at a tie.
Bet 13: $10 on Slotkin (MI-08)
An important factor in this race is the blowouts top of the ticket in the state – we think the lack of competitive Senate and Gubernatorial races could drag down the GOP in this House race.
Bet 14: $10 on Fletcher (TX-07)
This is the sort of suburban district where Democrats want to play and we think they’ve still got a chance. We think the enthusiasm for Beto will spill-over down ballot, so we’re making a bet on this race. We bought at 39 cents, but polling shows this as a basically 50/50 race.
Bet 15: $10 on Axne (IA-03)
After swinging dramatically to Trump, Iowa offers Democrats some of their best pick-up opportunities. We think Axne is the favorite favorite here and we’re putting a few bucks behind it.
House Races - Blue Wave
Bet 16: $10 on Campa-Najjar (CA-50)
Joe Trippi made magic happen in Alabama, and we think maybe he can do it here. Shares are cheap here, despite a recent UC Berkeley survey putting the race at 2 points. We’d more than triple our money if he wins.
Bet 17: $10 on Ojeda (WV-03)
WV-03 might be the cycle’s most interesting race - Trump won it by a massive margin, but Ojeda is close in the polls. We’d nearly triple our money if he wins.
Bet 18: $10 on McMurray (NY-27)
This should be a safe Democratic seat, but Collins’s scandals and total lack of campaigning are drugging him down. Polling shows this is a tight race. We’d more than double our money if McMurray pulls it out and a recent Upshot/Siena poll has this as a four-point race with Collins approval underwater by eight points.
Bet 19: $10 on Gershon (NY-01)
Gershon is the lowest likelihood event we’re betting on, we’d more than quintuple our money were he to win. He recently picked up a big endorsement from Newsday.
Bet 20: $3 on Ortiz Jones (TX-23)
To close it out the remainders (some of our bets couldn’t be exact), we put some money on Ortiz Jones. There’s not a lot of weakness from Allred showing in the polls, but the NRCC did make a last minute intervention due to the strength of fundraising from Ortiz Jones.
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