Our article takes a look at the history of political betting focusing on the United States. Wagering on politics is not a new phenomenon, and it was important back in the day as it is now. When it comes to political betting there is a certain speciality, due to its importance to people’s everyday lives. Find out how it started, and why people even in academic circles pay attention to it.
Wagering on political events and outcomes has a long history. While many think it is a recent and smaller segment of the online gambling industry. The fact is, political betting has a long tradition in the Western world. The reason there is so much interest in the history of political betting is, of course, its influence on our everyday life. Major news outlets, political analysts and even people in academia pay attention to the development of political betting odds on online sportsbooks in the US. Bets on politics differ from general sports betting and novelty or entertainment bets. Odds on political outcomes always brake news. Therefore we take a look at how political betting started and why it is important even outside of the gambling industry.
How political betting started to gain credibility
Taking a quick journey back in time, let us take a look at the 1916 US Presidental elections. In 1916, the race between Woodrow Wilson and Charles Evans Hughes was super close, and it created a lot of betting action. Betting of course was fun, but it also created something even more interesting and valuable. The information appeared on who might win. This is important since, at that point in time, we couldn’t talk about official polls, scientific data or even a broad coverage in media about possible outcomes. However, there were the odds. Moreover, such odds turned out the be weirdly accurate and broke into the news. In fact, of the 15 presidential elections between 1884 and 1940, the markets were only ever wrong once (Source: NPR). The way how political betting started quickly became more than just winning money.
From New York City to online sportsbooks
In the United States, the history of political betting starts where else than in New York City. New York was the centre of national betting activity. The available evidence suggests, that the New York market accounted for over one-half of the total election betting. Of course, the market evolved a lot over time. In the 1880s, betting moved out of the poolrooms and became centred on the Curb Exchange and the major Broadway hotels until the mid-1910s. In the 1920s and 1930s, Wall Street took over the trade.
At this time, the betting activity on presidential elections was unbelievably large. For brief periods, betting on political outcomes at the Curb Exchange in New York would exceed trading in stocks and bonds. Understandably, the New York betting markets were famous for their ability to predict election outcomes – with crazy accuracy. In summary, betting odds at this time possessed much better and more information on predictable outcomes than any other generally available information on such events (Source: Journal of Economic Perspectives).
Political betting these days
In recent year, political betting trends on online gambling sites in the US. It is driven by the bookmaking industry in states where online sports/politics betting is legal. In a recent article, we collected recent and predicted gambling law changes in the US, in this regard. It is important to follow gambling legislations in your state not just in the case of political betting. When following online sportsbook news in the US, we come across so there are so many political bets, even ones way ahead in the future. On sites like Bovada betting options vary from broad and simple ones, like who will be the next Prime Minister or President, to more specifics, such as bets on Kamala Harris to become the first female President of the US.
The fact that more and more political events feature on sites also proves the popularity of politics betting. Many argue, that despite the concerns of odd manipulation, favourites in fact, usually win, even at the time before opinion polling. The relationship between scientific polling and odds are quite interesting. When we uncover how political betting started, it is inevitably to take a look at its current relationship with polling and the media. Even more so with the effects of technological developments.
The history of political betting and political polls
The literature on the accuracy and importance of political betting in academia is in fact, surprisingly supportive. Back in 2020, it broke CNN news what someone had placed a $1 million on Joe Biden to be the next President of the United States. It is not a single case, yet we can draw a lot of information from this. According to analysts, big betters usually wager on the favourites and tend to place there bet close to the election. While opinion polling tries to capture some idea of the public, odds often reflect some insider information. Furthermore, when people back up their opinion with money and ultimately a market is formed, the figures involved are in the public interest, arguably more so than polls (Source: LSE Blogs). But as it happens, polls and odds and conflict.
As an example, before the UK’s Brexit referendum, traditional polls showed the race extremely close between leave and remain. On the other hand, political odds should a wide lead to remain. As it happened, polling proved to be more accurate than the political bettors (Source: CNBC). Of course, traditional opinion polling also faces a lot of criticism, as it is only as good as its sampling. While polling reflects a more general opinion of wider spectrums of the society at a given time, odds reflect a given outcome eventually prevailing. As for academia’s standing point, we should not ignore political odds. However, they do not replace scientific polling. Reflecting on the ways political betting started, it targeted a very small niche of a given society or even within the gambling world.
Some concerns scientists expressed
Political betting is not legal in various places, due to its manipulating effects. In an article, Forbes mentions that at the 2012 Presidential elections, two economists placed a $4-7 million bet on Mitt Romney to defeat President Barack Obama. The scientists conclude the “Romney Whale” could have been hedging against earlier Obama wagers or smelled an upset, but was more likely an attempt to boost Republican voter morale. Also, Trump’s election also raised some crazy big bets.
Opinion forming can be an asset pf both political odds and polls. How political betting started thus concludes a public desire for gambling, but also for awareness of political events. Such shaping factors like elections and party majorities heavily affect a nation’s future. No wonder both the public, media and the scientific world would like to know as much as possible. When comparing odds on Bovada for example, always make sure you check the applicable polls too. After all, this is what researchers do as well. Therefore, try to get a picture of events as wide as you can. For this, we recommend our guide on politics betting!