• Will sports wagering expand to political events? Should it?

    The Los Angeles Times has a news report on Las Vegas bookmakers taking some bets on non-sporting events.

    Let me explain why that’s important and why it should be encouraged.

    ♦♦♦♦♦♦♦

    As Vegas sports books expand betting options, MVP voting is fair game. Will presidential elections be next? (Los Angeles Times)

    And though bets on nonsporting events — such as the Academy Awards, the presidential election and reality TV shows — are not allowed in Nevada, they are permitted overseas, and interest in such betting provides a push for casinos to expand their portfolios beyond traditional wagering.

    But regulators and casinos remain mindful of tampering or influence where voting, rather than scoring, decides an outcome. They have instituted safety measures, such as halting betting well before voting takes place and capping the amount that can be won — usually about $10,000. Most casinos require identification through a player’s card for bigger bets.

    “We’re not going to take six-figure bets on these,” said Jay Kornegay, Westgate’s vice president of race and sports book operations. –LA Times

    ♦♦♦♦♦♦♦

    My Comments

    These “Prediction Markets” provide valuable information to the public

    • Everything we know about these betting markets suggests they give us the best, unbiased forecasts of future outcomes
      • To put it concretely, you cannot regularly beat the “line” in pro football bets unless you have valuable, non-public information, such as the extent of a player’s injury.
      • If you actually have such information and can legally bet by using it, your bet will change the odds. That gives the public some real information, in the same way that price movements for milk or chicken at the supermarket give you information about shortages or surpluses.
    • The deeper the betting pool, the more reliable the forecasts
      • Are they more reliable than polls? Yes, because the bettors incorporate information from the polls in their betting.
      • In fact, they incorporate information from every source and have powerful incentives to get more information and to distinguish signal from noise.
      • There are such markets now in England, but Americans are restricted in using them; there are small markets (largely for academic purposes) in the US. Larger, deeper markets would be far more informative.
    • Allowing legal betting on political events such as presidential or Congressional elections would make these markets much, much deeper–and give the public better information
    • The only reason to block these bets (besides general opposition to gambling) is the possibility the events themselves could be corruptly influenced by bettors.
      • The fact that many states have lotteries indicates there is no general opposition (though state legislatures may not want any competition)
      • Corrupt influence is far more likely in sports, such as mobsters bribing fighters to throw a match
      • It can also happen in financial markets, such as a major oil-producing country betting on the futures markets, using inside knowledge that the state itself will expand or cut its production
    • The risks of bettors corruptly changing outcomes they bet on is remote and almost certainly less than in other markets were wagering is permitted.
    • For these reasons, political wagering should be permitted in states that also permit sports wagering

    Some examples where it would be valuable for the public to know the odds:

    1. Will the government of Venezuela be overthrown by Dec. 31, 2017
    2. Will Bashar al-Assad still be in office by December 31, 2017?
    3. Will Boris Johnson be Prime Minister of the United Kingdom on September 1, 2017?
    4. Will Pres. Donald Trump complete his full first term in office?
    5. Will the Democrats win control of the House of Representatives in 2018?

    Lots of people are interested in these events and some would like more accurate forecasts about the outcome. For example, oil producers would like to know more about Venezuela as they plan their own production. By the same token, they may have good sources of information about the situation there so their bets would inform others by changing the odds.

    Knowing the odds in political-prediction markets would be very informative to them and to policymakers.

    On international events, for instance, it would give the National Security Council, CIA, Defense Department, and State Department additional information to incorporate in their policy planning.

    For these prediction markets to work well, the outcomes would have to be well-defined before the events. To bet on the outcome in Venezuela, for instance, I need to know the exact definition of “overthrowing the government.”

    That is obviously more complex than setting a 3.5 point spread for a football game, but it is already done in today’s thinner prediction markets. So, I don’t see any insurmountable technical reasons why political prediction markets cannot be expanded.

    They would certainly be useful–to the public and to policymakers.

    ♦♦♦♦♦♦♦

    If the general topic interests you, I highly recommend a fascinating (and non-technical) book:

    The Wisdom of Crowds Paperback by James Surowiecki

    Surowiecki is not a cheerleader for all crowdsourcing.

    The book explains, in clear, lucid prose, when it works well and when it does not.

     

  • Goodbye Independent Voters. Hello Switch Hitters

    Many voters say they are “independent,” not affiliated with either party.

    You might think both parties would court them avidly, giving them extra weight in elections.

    The reality is that they have surprisingly little political leverage.  Is there a different and more effective political leverage option?

    A New Name for Independents

    The replacement for independent voters may be political “switch hitters,” a term borrowed from baseball – batters who are effective from either their or right sides when they bat opposite a left- or right-throwing pitcher.

    The critical difference is that an independent voter operates outside of the political stadium; the switch hitter plays every day inside of the political stadium.

    Why Independent Parties Fail

    There are multiple reasons why even a well-organized and funded independent party will not prevail or even have a significant effect in presidential elections.

    • The Electoral College system wherein the state winner takes all.
    • No prize for winning even 20% or more, but less than a majority, of a state’s vote.
    • Voters tend to vote for apparent winners.
    • Lack of major funding for television commercials.

    The relative political power of independent voters is a myth. Try something that is politically realistic and potentially effective. In 1912, Theodore Roosevelt ran for the office of president on the independent third-party Bull Moose ticket – he lost to Woodrow Wilson. In 1992, Ross Perot received 19% of the popular vote and zero Electoral College votes.

    Each state decides third-party access to the presidential ballot. The US Supreme Court has made it difficult for states to prevent independent third-party access to the ballot by prohibiting virtually impossible criteria. It is now easier for an independent candidate to be on the ballot, but independents and third-party candidates remain political orphans.

    The political reality: when Democrats vote for Democrats, and Republicans vote for Republicans, and independents vote for independent candidates, the long-established Democratic and Republican political parties always win.

    How Do Voters become “Independent”?

    A potential independent voter must leave the warm nest of either the Democratic or Republican parties established by their parents and social groups. The young generation independent voter is inculcated to be a partisan voter. Leaving one’s party affiliation traumatic, similar to leaving one’s organized-religion affiliation. It’s much easier to be an independent if one had no long-standing political affiliation in the first place.

    Still, some people do change. Perhaps they are motivated by disgust with the established parties. Perhaps they are swept away by a particular candidate or issue. A few change affiliations because they change their basic political outlook.

    Is there a pure independent voter?  Probably not. The independent voter is either Democrat- or Republican-leaning. There may be 5% of voters who meet most of the independent voter criteria checklist, notwithstanding the voter statistics arrayed below.

    The markers used by voter research agencies are reasonably consistent:

    • Moderates, 47%; liberal, 29%; conservatives, 24%.
    • Party leaning: independent, 20%; Democrat, 45%; Republican, 33%.
    • Most recent affiliation tally: independent, 36-42%; Democrat, 32-36%; Republican, 23-26%.

    Why do political polling statistics find that independents are a dominant political force? Political statistics are inconsistent, or skewed, for several reasons, from one-time shocks to ticket splitting because of particular candidates, rather than changed partisanship.

    To me, this strongly suggests those who say 40% of voters are independent are vastly overestimating. Maybe Ross Perot’s 19% is the highest mark for the independent voter.

    The Message to Independent Voters: Focus on Substantive Issues, Not Winning the Oval Office

    The message for independents is partially good news. Don’t quit now. Abandon presidential leverage expectations, focus on substantive issues for the common good, and achieve well-defined strategic objectives by stratagem and stealth.

    Independents should consider becoming political party switch hitters who can focus on beneficial, substantive issues from within either established political party. How can they leverage their votes to compel the president, and Democrats, and Republicans to question and resolve their dysfunction? Politics is not an end in itself. It is the vehicle by which government is achieved. A government that understands that the US is in peril; one that can create national good feeling, constructiveness, and competency that is based on mutual respect and stability.

    The strategic objective is in the collective American gut: small and large businesses that provide jobs for those who are able and willing to work; use government regulatory power sparingly to promote love of country among classes; continue to attract and welcome qualified immigrants who enhance our productive capacity and will become US citizens; and have the capacity for global leadership that is backed by constrained military power.

    How can beneficial change be implemented?

    Use the electronic internet infrastructure, present and future, in place of the traditional political organization that requires many personnel and much money to operate. The key concept: do your own thing; tell your selected political party what your thing is. Aggregate substantive concepts and ideas, and array them on the Internet. Note that rescuing a dog from a well will receive more than one million hits overnight. This phenomenon can be used to auction switch hitters and their policies to the highest bidders, whether Democrat or Republican.

    Political leverage is achieved by letting state and local parties know that you and your switch-hitter colleagues have a substantive agenda and that, if most of your ideas are incorporated into their agenda, your vote will be theirs.

    Remember the critical concept

    • Independents play in the parking lot, outside the political stadium
    • Switch hitters come up to bat every day.

    ♦♦♦♦♦♦

    Richard Friedman was chair of the National Strategy Forum/Chicago. He has served as a Distinguished Senior Fellow at the Chicago Council on Global Affairs and Counselor to the American Bar Association Committee on National Security.

  • Fascinating poll: Trump approval shows how deeply divided the parties are

    Even if you know how deeply divided America is, these poll results are still startling.

    Republicans are strongly–and increasingly–supportive.

    Democrats are strongly–and increasingly–appalled.

    Independents are well under 50% and hardly moving.

    To

    • Charles Franklin for the polling and clear presentation
    • Stathis Kalyvas for tweeting it
  • ZipDialog’s Roundup of News Beyond the Front Page . . Tuesday, October 4

    Hand-picked and farm-fresh–
    Linked articles in bold purple

    zd-flags-us-russia-200w-margins-left-right♦ US-Russian Relations continue to spiral downward over Syria and Ukraine (Associated Press)

    Already testy, relations between the United States and Russia plummeted Monday as Washington suspended diplomatic contacts with Moscow over failed efforts to end the war in Syria and President Vladimir Putin put on hold a deal with the U.S. on disposing weapons-grade plutonium. … The Obama administration said it decided to cut off discussions on Syria because Russia had not lived up to the terms of last month’s agreement to restore a tattered cease-fire and ensure sustained deliveries of humanitarian aid to besieged cities, such as Aleppo, which has been under bombardment from Russian and Syrian forces. –Associated Press


    ♦ “Welcome to our University. You are now entering a Republican-Free Zone,” according to a survey of 40 universities reported in Econ Journal Watch.

    We investigate the voter registration of faculty at 40 leading U.S. universities in the fields of Economics, History, Journalism/Communications, Law, and Psychology. We looked up 7,243 professors and found 3,623 to be registered Democratic and 314 Republican, for an overall D:R ratio of 11.5:1. The D:R ratios for the five fields were: Economics 4.5:1, History 33.5:1, Journalism/Communications 20.0:1, Law 8.6:1, and Psychology 17.4:1. The results indicate that D:R ratios have increased since 2004, and the age profile suggests that in the future they will be even higher. –Mitchell Langbert, Anthony J. Quain, and Daniel B. Klein in Econ Journal Watch

    ratio-of-dems-to-rs-on-faculty

    predictit_logo I use political betting markets to supplement the polls and polling averages. Now, Ethan Epstein writes that the political betting markets have serious flaws. (Weekly Standard)

    Comment: Epstein’s conclusions may be right, but his arguments are not. His main point is that the markets sometimes get it wrong. They missed the rise of Trump, thought Britain would vote down Brexit, and guessed wrong about the Columbia truce. That’s correct. But the question is whether these markets are systematically wrong or just make some errors. If they make errors, the likely reason is that the markets do not incorporate all available information. The reason is that bets are extremely limited by law. If somebody had great ideas about Brexit or Trump, she could not bet a million dollars, as she could if she thought oil prices were going up or down. The markets would be more useful if they permitted larger bets. That’s why football betting odds are so efficient.

     

    erodgan-flag-labeled-300px♦ Turkey’s army being politically purged by Pres. Recep Tayyip Erdogan after failed coup. (The Economist) Some 5,000 officers have been fired, including half the military’s generals and admirals. Why? Because the army’s main goal is not to fight external foes but to keep the current leader in power. So political reliability trumps military effectiveness. Another 70,000 civil servants have been fired or suspended, including many in the justice system. About half of them are now in jail.

    Ethicist argues the New York Times was wrong to publish Donald Trump’s taxes, and wrong to actively seek someone who would leak them. trump-1995-taxes-bigHere is the basic argument, as made by Jack Marshall:

    The New York Times should not be publishing anyone’s tax returns who has not publicly released them. It’s unethical. They Times has the right to print just about anything, or course, but like all newspapers, it is obligated to exercise that right responsibly and fairly. This is neither. Tax returns are private. These tax returns reveal no crime, and nothing unethical on Trump’s part. –Jack Marshall in Ethics Alarms blog

    ♦ Taxi business off 25% in Chicago because of competition from Uber and Lyft. (DNA Info Chicago) Public transit has also said they are facing price competition from the low cost of ride-sharing. 

    ♦♦♦♦♦♦♦

  • All the polling averages and betting markets in one snapshot . . Saturday, September 24

    Polling averages and political betting markets as of Saturday, September 24.


     

    predictions-sept-24c

    ♦ What about control of the Senate? Very tight race, with conflicting predictions.

    • Princeton Election Consortium estimates the Republicans maintain control (49 seats to the Democratic side, including Independents who caucus with them).
    • PredictIt market says the Democrats win will control (53% chance).
  • Lastest battleground polls

    0 No tags Permalink 0

    ♦ Nate Silver tweets: Our  forecast has it close right now . . . because that’s what the polls show. It’s as simple as that.”

    He gives Clinton a 57.7% chance of winning. (538) Neither candidate has much chance of a landslide, he says.

    ♦ Taegan Goddard’s Political Wire rounds up the key state polls:

    • North Carolina: Trump 45%, Clinton 43% (PPP)
    • New Hampshire: Clinton 47%, Trump 38% (Monmouth)
    • Wisconsin: Clinton 41%, Trump 38% (Marquette)
    • Nevada: Trump 42%, Clinton 40% (Insights West)
    • Arizona: Trump 37%, Clinton 33% (Insights West)
    • Ohio: Trump 42%, Clinton 37% (Fox)
    • North Carolina: Trump 45%, Clinton 40% (Fox)
    • Nevada: Trump 43%, Clinton 40% (Fox)

    Comment:

    1. The polls are close in nearly all of them, most within the margin of error
    2. Neither candidate gets above 45%, except for Clinton in NH
    3. Everything has to be reevaluated after Monday’s debate

    (Charles Lipson comment)


    hat-tip-100px-w-right-margin♥ Hat tip to Mike Bauer for the Nate Silver tweet.

  • Who will win the Senate?

    The Washington Post makes its initial forecast on the 2016 Senate. They predict the Republicans will hold it. 

    34 seats are up, 24 of them are Republican.

    Aaron Blake, who writes “The Fix” for the Washington Post, sees the race boiling down to four toss-ups:

    ♦ Indiana
    ♦ Nevada
    ♦ New Hampshire
    ♦ Pennsylvania

    If Blake is correct about the other states, then the Democrats have to win 3 of these toss-ups if Hillary wins (because the 50-50 tie would then be broken by VP Tim Kaine).

    If Trump wins, then the Democrats have to win all four toss-ups to flip the Senate.

    Still, it is worth noting that this forecast assumes that all states go the direction they are “leaning.” That’s far from certain, and there are lot more of those iffy contests on the Republican side.senate-predictions-wapo-9-20-16-edited-final

     

     

     

     

    hat-tip-100px-w-right-margin♦ Hat tip to Mike Bauer for sending me the article.