It’s now legal to bet on the outcome of the November election.
The Commodity Futures Trading Commission had blocked the Kalshi prediction market from letting investors wager on which party will control Congress after the November election. But last week a federal judge sided with Kalshi. If her ruling stands, you can expect Americans to have lots more election-related opportunities to gamble.
Outside the US, the Wall Street Journal noted, Britons have been able to bet on their elections. Non-Americans can bet on the Kamala Harris-Donald Trump race on Polymarket. As of Saturday, $830 million in betting on Polymarket was riding on the race, with Trump leading Harris, 50% to 48%. If you agree with the bettors there, you’ll also favor the Chiefs to win the Super Bowl, the Dodgers to take the World Series, the Fed to cut interest rates this month by a quarter of a point, rather than a half, and “Inside Out 2” to win the crown for the year’s highest-grossing movie.
There are also two prediction markets that operate legally in the US under an exemption for academic-related enterprises, as Jeff Sommer pointed out in the New York Times — the Iowa Electronic Markets and PredictIt!
On PredictIt!, investors are wagering that Kamala Harris will beat Donald Trump. Prediction markets can be another source of insight, aside from polls, into where the presidential race stands.
But it’s not only gambling that’s driving the prediction business for the November election. You can blame polls, pundits and prognosticators for a media-driven fascination with knowing the unknowable. The always interesting Nate Silver, whose Substack now boasts more than 200,000 subscribers, said this weekend that his prediction model now forecasts a 20 percent chance Harris will win the popular vote but lose the Electoral College.
What is the real value of such forecasts two months before election day? On October 18, 2016, the New York Times “Presidential Forecast” was headlined “Hillary Clinton has a 91% chance to win.” That was on the eve of the third and last presidential debate between Clinton and Trump and before James Comey announced he was reopening an investigation of Clinton’s emails, only to say a few days later there was no new evidence to support charges against her.
The Needle
Still, on election night 2016, the New York Times’ “Needle” gave Clinton an 84% chance of winning, before it swung to Trump after the votes started coming in. Aside from stoking anxiety, what was the value of The Needle?
Silver founded FiveThirtyEight, named after the number of electors in the Electoral College, in 2008. The site was eventually acquired by ABC News, and Silver left ABC in 2023. But FiveThirtyEight continues to produce an election model, which now says Harris “wins 55 times out of 100 in our simulations of the 2024 presidential election.”
Election models are also available on outlets such as the Economist, which currently gives both Harris and Trump a 1 in 2 chance of winning the Electoral College.
Counting sheep
The prediction business has come a long way since its ancient analogues, such as “consulting the entrails” of sacrificed sheep.
“For a thousand years people consulted the Oracle at Delphi in ancient Greece in an attempt to know what the future held,” a writer at Scientific American observed in 2013. “The Oracle was a priestess in a cave who became disoriented by volcanic fumes and babbled incoherently. These days we don’t believe any of that nonsense. Instead we can see the future because we consult thinkers and scientists and journalists and, well, all sorts of clever people. On second thoughts, perhaps the Oracle at Delphi was more reliable.”
Physicist Niels Bohr (or was it Yogi Berra?) famously said, “It is very difficult to predict, especially the future.” In financial markets, predictions routinely go awry: “Wall Street indexes predicted nine out of the last five recessions,” economist Paul Samuelson joked.
Writing for Wired in 2021, Amanda Rees wrote, “Rulers from Mesopotamia to Manhattan have sought knowledge of the future in order to obtain strategic advantages—but time and again, they have failed to interpret it correctly, or they have failed to grasp either the political motives or the speculative limitations of those who proffer it. More often than not, they have also chosen to ignore futures that force them to face uncomfortable truths. Even the technological innovations of the 21st century have failed to change these basic problems—the results of computer programs are, after all, only as accurate as their data input.”
Particular prophecies
The urge to know the future is clearly built into our psyches, and for good reason since predicting is an indispensable part of preparing for what could happen. But election predictions are a particular subspecies of prophecy, in which the event is fixed but the outcome is uncertain.
We know that, barring a cataclysm, America’s election will be held in 58 days from Saturday, we just don’t know what the result will be. If many of the predictions turn out to be wrong, as they were in recent presidential elections, the discrepancy will be attributed to “polling error” or defects in the election models. So what do we gain from a hyper-focus on predictions? Maybe the best benefit is that it might help us place the right bets.
All that being said, I have to admit that I’m addicted to election forecasts like those of Nate Silver and can’t avoid clicking on headlines like this one: “Why I Still Think Trump Will Win,” by Ross Douthat in the New York Times.
Oddly, Douthat and a fellow Times columnist had just written a pair of commentary pieces predicated on the potential outcome of the election. To be sure, they weren’t necessarily predictions, but more hypothetical conjectures.
“This week,” Douthat wrote, “my colleague David Brooks and I offered dispatches from two different futures: One in which Kamala Harris edges out Donald Trump for the presidency, and one in which Trump is victorious. I wrote the “How Harris Wins” narrative, exploring a scenario in which the Democratic nominee succeeds in her effort to Marie Kondo-fy progressive politics, tidying things up by reducing the Democratic agenda to just a few popular components, and letting that simplified, joy-sparking platform expose the internal tensions of the Republican Party’s coalition of the discontented.”
“That’s a vision of what could happen,” Douthat continued, “and I think that Harris has a good chance to win in exactly the way that I describe. But if you forced me to place a bet on what will happen, my current expectations are closer to the scenario offered by my colleague — in which Trump, not Harris, is the next president of the United States.”
Why not just wait to see what happens? There’s a lot that can still develop, particularly at Tuesday’s debate between Harris and Trump.
After all, before the June 27 debate, we had every reason to expect that President Joe Biden would be the Democratic candidate opposing Trump.
“Before the June 27 debate, we had every reason to expect that President Joe Biden would be the Democratic candidate opposing Trump.”
This isn’t the first time I’ve quoted an observation from Robert Harris’ trilogy of novels on the life of Cicero, but I still find it especially apt: “You can always spot a fool, for he is the man who will tell you he knows who is going to win an election.”
An election, Harris’s narrator observes, is “the most vigorously alive thing there is — with thousands upon thousands of brains and limbs and eyes and thoughts and desires … it will wriggle and turn and run off in directions no one ever predicted, sometimes just for the joy of proving the wiseacres wrong.”