According to PredictIt, a trading platform for political outcomes, Elizabeth Warren has emerged as the most likely candidate to obtain the Democratic Party’s nomination as its presidential candidate in the 2020 race for the White House.
It is a stunning turn-around for Warren, who currently serves as Senator for Massachusetts and who is allied with the party’s progressive wing. As late as mid-May, Warren was 25 points behind previous favourite and Democrat establishment poster boy Joe Biden – Warren was then priced at 11 cents, Biden at 36 cents.
Warren is currently priced by PredictIt traders at 30 cents – corresponding to an equivalent probability of 30% of obtaining the nomination – whilst Biden has fallen to 27 cents.
Bookmakers Play Catch-up
However, with two solid performances in the recent Democratic debates and a campaign that has focused on policies for removing the influence of private interest groups in US national governance, Warren’s long-game strategy appears to be paying off.
Even more ominously for Biden, Warren’s progress has been marked by steady gains as opposed to sudden jumps in popularity as witnessed with Kamala Harris whose own campaign has lost steam since her headline-grabbing performance in the first round of debates in late June.
As a result, Warren is today priced by William Hill at 5/1 – corresponding to a probability of 16.7% – to become the first female president in US history, fractionally ahead of Biden (6/1, probability 14.3%) for the first time with bookmakers since the market was created.
This most recent example of bookmakers playing catch-up appears to lend further weight to the view that political stock markets like PredictIt and Smarkets offer much more accurate reflections of the real odds for political outcomes, provided the corresponding markets have high liquidity.