By Ryan Vlastelica
NEW YORK, Nov 6 (Reuters) – Trading in U.S. stocks was quiet
on Tuesday but betting on the U.S. presidential race reached
fever pitch, with most online gambling sites giving President
Barack Obama favorable odds to win.
With the first polls set to close at 7 p.m. ET in a handful
of states, gamblers were still frantically placing final bets on
the outcome of the election between Obama and Republican
challenger Mitt Romney.
At InTrade, a website that allows users to play events like
the election for a monthly fee, 3.8 million “shares” traded in
Obama and about 3.1 million Romney shares traded on Tuesday.
In late October, each candidate typically saw between 50,000
and 60,000 shares of daily volume, according to Carl Wolfenden,
exchange operations manager at InTrade, which is based in
Dublin, Ireland.
The site operates like a futures exchange, with users
betting on the odds of an event occurring. Currently, shares in
Obama are going for $6.89, indicating he has a 68.9 percent
chance of being reelected. If Obama wins, each contract will
close out at $10, netting investors a profit of $3.11 a share.
If he loses, contracts will close at $0.
On PaddyPower.com, another online betting site based in
Dublin, the odds heavily favor the president. Romney is a
four-to-one underdog to win, where Obama is a one-to-six
favorite, meaning a $6 bet on Obama would pay out $1.
Obama’s edge on the site mirrors the expectations of many
polling strategists who see the president with a small lead in
national polls and an edge in key swing states like Ohio and
Virginia. The final Reuters/Ipsos tracking poll showed the
incumbent up two points nationally against Romney, at 48 percent
to 46 percent.
The level of trading on the site Tuesday counters a
prominent criticism of such online markets, which is that
limited use allows for the contracts to be pushed around,
rendering them inaccurate reflections of the odds of an event
occurring.
On Oct. 23, a rash of bets favoring Romney caused the odds
for the former governor of Massachusetts to spike suddenly and
then evaporate. Wolfenden estimated that there were a mere 40
Romney buyers that morning and only five sellers.
That kind of limited play continued in some of InTrade’s
smaller contracts. Romney is expected to win the state of
Alabama in a landslide, but the mere nine contracts traded over
the state suggests he only has a 60 percent chance of winning.
That puts the state in InTrade’s “leaning Republican” column.
To compare, a competitive state like Ohio is seeing a great
deal more interest, with almost 26,000 shares traded in Obama
and another 19,000 in Romney.
For those inclined to skip the heated trading in this race,
Paddypower already has odds on the winner of the 2016
Presidential election, with Romney currently standing with
9-to-2 odds and Secretary of State Hilary Clinton at 8-to-1
odds.
Those who prefer to bet on long-shots could consider a play
on Donald Trump, who carries 100-to-1 odds on occupying the
White House in four years.
(Editing by Andrew Hay)
