Betting odds indicate that outsider Democratic presidential candidate Andrew Yang has a better shot at the nomination than party heavyweights such as Sens. Cory Booker of New Jersey, Elizabeth Warren of Massachusetts, and Kirsten Gillibrand of New York.
The website ElectionBettingOdds.com, which aggregates numbers from two of the largest online election betting sites, gave Yang a 5.9 percent chance of winning the nomination as of Monday night. Only four candidates had better chances: Sen. Bernie Sanders of Vermont, former Vice President Joe Biden, Sen. Kamala Harris of California, and former Texas Rep. Beto O’Rourke.
Maxim Lott, the site’s founder, said the numbers are a sign of enthusiasm for Yang, a 44-year-old tech entrepreneur whose main campaign pitch is giving every American adult $1,000 a month in the form of a “Freedom Dividend.” The proposal, commonly known as universal basic income, has propelled Yang to Internet fame.
“Bettors are factoring that enthusiasm into their predictions, which is why they give Yang a chance even as polls and media do not,” Lott said.
The “Yang Gang,” Yang fans who promote him online and on social media through memes, recently helped him qualify for the first debate stage in June by clearing the Democratic National Committee’s requirement of 65,000 individual donations.
Recent polling suggests Yang’s online popularity has begun to translate into real-life support. A March Monmouth University poll put his support among Democrats at 1 percent — low, but better than that of much better established Democrats, such as Gillibrand and Washington state Gov. Jay Inslee.
Yang’s campaign is a potential “diamond in the rough,” said Koleman Strumpf, a professor of economics at Wake Forest University who focuses on election prediction markets. Strumpf said betting markets do a better job of predicting actual votes than do polls, which tend to favor name recognition in the early stages of campaigns.
“I don’t put a lot of stock in polls right now,” said Strumpf. “Prediction markets presumably are going to be more attuned to how people will actually end up voting.”
Election prediction markets have a long track record dating back to the 18th century, according to Strumpf. The most recent version of election markets are online: PredictIt, based in New Zealand, focuses on U.S. elections, and the European betting site Betfair hosts many different kinds of online gambling.
A major advantage prediction markets have over polls is that they can take into account factors such as a candidate’s potential, as opposed to just performance. “By and large they are very, very accurate,” Strumpf said. “They’re more accurate than polls or basically the best thing we have in terms of making forecast.”
Nevertheless, prediction markets had glaring misses. In 2016, notably, betting sites missed the success of the Brexit vote and the election of Donald Trump.
Days before the 2016 general election, PredictIt showed Hillary Clinton an 81 percent chance of winning the election, a significantly higher percentage chance than poll aggregator site 538 gave Clinton. Betting sites also showed Britain would vote to remain in the European Union until right before votes were counted.
Strumpf said while there might be some hesitation to trust betting markets after 2016, he added their inaccuracy reflected the paucity of information pointing to Trump’s victory and the decisive Brexit vote.
“These markets sort of summarize what we know collectively,” he said. “And in some sense collectively we didn’t know a lot in 2016.”
Strumpf said, though, that caution was warranted in interpreting Yang’s strength in prediction markets, saying it is possible his online-heavy support has caused a fixation which might not materialize in the real world.
Lott said the market odds suggest both optimism and caution for Yang. “We should keep in mind that 6 percent still means a Yang win is extremely unlikely,” he said. “But the betting hints that he’ll at least have his day in the sun.”
