(AFP) – Nov 3, 2008
NEW YORK (AFP) — Wall Street may be a mess, but in the final hours before Tuesday's US election one share just keeps rising: Barack Obama.
Stock market-style betting systems are trading Obama and his Republican rival John McCain like any other commodity -- minus all the turbulence.
Intrade.com, one of the world's biggest prediction markets, quotes Obama at 91.2 percent likely to win and McCain at 9.4 percent, with the spread widening by the hour.
That means a profit of less than nine cents per dollar invested on an Obama win and a whopping 90.6 cents in case of a McCain upset.
Another, the Iowa Electronic Markets, predicts Obama 91.5 percent likely to get in and McCain 8.6 percent.
Political futures trading doesn't get the attention given to opinion polls.
Yet bookies say their predictions, based on cold money instead of heated politics, are often more accurate.
"When someone bets, they are backing it up with what's coming out of their wallets. So it's not only an emotional investment, but a financial investment," said Ken Robertson at Paddy Power, Ireland's biggest bookmaker.
"That's better than basically standing in the street and asking people questions," he told AFP.
The Iowa Electronic Markets, which is run by the University of Iowa as a research project, found in a study that it had beaten the polls 74 percent of the time over 20 years.
That's because ratings are driven by a market, according to spokesman Tom Snee.
The project allows maximum bets of 500 dollars, enough to concentrate the minds of investors, who tend to be more educated about politics than the average target of a pollster.
"The difference is that polls ask 'who do you plan to vote for?', which is really 'who do you want to win?' We ask, 'who do you think will win?'" Snee said.
"So it's the difference between your heart and your head. If you put 500 dollars on it, then it will be about who you think will win."
Even if the race appears sewn up for Obama, big gambling houses say they will keep bets open right up until results come in.
Three weeks ago Paddy Power paid out a million euros on Obama as president, declaring the race as good as over. But bets reopened immediately, with latest odds of 1:14 for Obama and a distant 13:2 for McCain.
Robertson said one of the most recent bets placed on Obama was worth 100,000 pounds, with a possible return of just over 11,000 pounds.
Not that everyone has given up on McCain. For the hard core gambler the Republican ticket may just be an enticing prospect.
"My money ... will be on the underdog John McCain at a fat, plus-money price," comments gambler Ted Sevransky on betting site covers.com.
Sevransky argues that while people may claim to back Obama, latent racism means they will actually vote the other way.
"This is a 50:50 election, just like the last two in a divided United States. That makes the plus price for McCain an easy wager to make."
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