Predictive markets completely reversed in favor of President Donald Trump late Tuesday, giving his reelection odds a significant boost after early returns in Florida and other swing states showed the incumbent outperforming his polling numbers.
While Democrat Joe Biden was heavily favored to win Tuesday’s general election, Trump appears to have prevailed in Florida, and key competitive states remain up for grabs. Amid a stronger-than-anticipated showing in heavily Democratic Miami, at least one outlet has officially called the Sunshine State for Trump, while he currently leads in Ohio and North Carolina.
During a volatile race in which oddsmakers have plowed over $1 billion into speculating on the eventual winner of the Oval Office, betting markets gave the former vice president the inside track as early as Tuesday evening. Now, Trump’s chances of being reelected have gotten a last minute boost as early returns swing in his favor.
Until late Tuesday, Smarkets investors gave Biden a better than 2-in-3 chance (67%) to be inaugurated, while a Real Clear Politics average shows similar odds, reflecting the former VP’s formidable lead in public opinion polls.
Yet Trump appears to be edging closer to duplicating his stunning 2016 victory. Smarkets showed his chances skyrocketing to 68% after the Florida polls closed, from under 40% early Tuesday. Separately, both Bookies.com and Oddshark now estimate the incumbent is the odds-on favorite — a sharp turnaround from early in the day — while stock futures soared in late trading.
‘Following the latest updates, Trump’s odds improved from 11/10 to 2/5, giving him an implied 71% of winning the election, Bookies.com said. Joe Biden’s odds have worsened significantly from 8/11 to 2/1, giving him an implied 33% chance.’’
“Early data is pointing toward some key Trump victories, which has caused his odds to shorten,” a US-Bookies spokesperson said. “Though Biden is still technically the favorite, the gap has tightened significantly over the past couple hours.”
Trump’s surprising showing in South Florida— which showed him outperforming among key demographics — has some political watchers prepared for a closer-than-expected race, and a contested result.
Still, bettors now anticipate Biden’s coattails will create a solid Democratic majority in both houses of Congress.
Several swing states the president won in 2016 are now trending in favor of Biden, according to Bookies.com data, solidifying the “Blue Wave” scenario that would clear a path toward a Senate majority that could unleash a wave of spending on key projects — and potentially higher taxes.
Trump’s strength in the Sunshine State may help him avert electoral disaster, “but Florida wasn’t a ‘must win’ for Biden in the same way it was for Trump,” said Smarkets analyst Patrick Flynn.
“Biden could yet put those crucial Midwestern states of Pennsylvania, Michigan and Wisconsin in his column, and he would win the election. Though Biden remains the favorite, there is a lot of uncertainty now with very few substantive results available outside of Florida,” Flynn added.
Meanwhile, bettors — most of whom never predicted Trump’s shock win in 2016 — are also positioned for the unexpected.
“With 60% of the money in our Next President market going on Trump, and more than double the number of users backing him compared to Biden, there is a clear view from the majority of users that the president could cause an upset,” said Smarkets Head of Political Markets Sarbjit Bakhshi earlier this week.
“However, the average amount a user bets on Biden is double the amount placed on Trump, suggesting those who are backing the former VP to win next week are more confident than those taking a chance on Trump,” he added.
Javier David is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek