How to Make Money on Politics - Arizona Edition
Hint - use propaganda to your advantage and trust what time tells you
In the closing weeks of the 2024 election cycle, I learned I had become a secret weapon for gamblers who were looking to cash in on President Trump’s impending victory. See if you can spot the one-month spike in my paid memberships:
That big spike on the right side of the graphic grew my total paid readership by more than 20%. With a lot of hard work and a few breaks, I’ve maintained it; Polymarket knew I was on to something when they had me for a Substack interview that ran on October 10:
I got laughed at by a few commenters after I gave these takes:
New Hampshire. I think Trump is at least 1 in 3 to take New Hampshire (🔮88% Harris in NH). If Trump sticks to his average performance off the voter registration index in two cycles in each of the counties, particularly Rockingham and Hillsborough, he has an edge of just under 5,000 votes there, which is subject to change with any updates or exploitation of election loopholes there. I don’t think either candidate has a ceiling in New Hampshire of much more than 10,000 votes, and if Trump manages to take a large victory, four states come into view - Virginia, New Hampshire, New Mexico, and Minnesota, and likely in that order. The other six states I group into the decisive states - Arizona, Nevada, Georgia, Michigan, Wisconsin, and Pennsylvania - would have already gone for Trump, along with North Carolina by a lot.
Trump Blowout Victory. Polymarket has odds for a Trump blowout victory (100+ electoral vote margin) at 11% and I think it’s around 25%. This is defined as something like Trump at 319+ electoral votes, which would mean he takes North Carolina and the six decisive states I just mentioned (312) plus Minnesota (322) or Virginia (325), or a combination of New Hampshire and New Mexico (321). Of all these, Minnesota is the least likely to go for Trump thanks to the actions of the Democrat trifecta legislature and governor, plus the “fortification” of the Twin Cities metro, which dominates the vote.
Florida Margin of Victory. There is a market on whether Trump will win Florida by 8+ points (🔮38% odds). I’d buy that with Trump projected to be 9-12 points up. Based on my registration modeling I’d give him a 75% chance to exceed 8 points. You have all 67 counties in the state with a rightward shift, and Trump doing much better with Latino voters. I would love to see a market on if Florida will vote to the right of Texas, I think it will. It is also a bullish sign in favor of a Trump landslide in Florida that Milton could have been much worse and likely will not depress pro-Trump turnout to great extent.
Every piece of advice I gave that day was right on the money. Not long after that, I sank Ann Selzer’s ship and maintained Iowa would go to Trump by a ridiculous margin:
My Take on "Harris +3 in Iowa" and the Battle for Narrative
Yesterday, I planned to minimize my time consuming election information and posting on social media and instead work on a few battleground state predictions, and wound up pushing out two – Nevada and Arizona. That plan changed for worse when Ann Selzer, the vaunted “gold standard” pollster of Iowa, pushed out a Harris +3 poll
People all over the world were ignoring the legacy media and trusting the data. It is time to play this game again. Of course, the standard disclaimer exists - that I am not responsible if you don’t win. If you do win, you should tell me so I can brag about it on here.
One of the interesting stories about how I got involved in election integrity revolves around my own bets on Trump’s 2020 election chances. All of my research suggested larger Trump margins of victory in every Midwestern state he won in 2016, and I could triple my money by picking him in places like Pennsylvania or Wisconsin because gamblers were following along with the mainstream media’s lies.
I haven’t bet on any elections since then, but it is always interesting to take a look at the odds. Selzer knew that her bad Iowa poll would tank Trump’s odds nationally and most importantly, in Wisconsin, where there is high correlation with Iowa’s political dynamics.
WHY PEOPLE MAKE STUPID BETS
Personal bias and partisanship - “my party is the best party.”
Fallacy of consensus - “everyone I know is voting for this guy.” I had this taint my view of the 2012 election because just about every Army officer I was serving with couldn’t stand Barack Obama.
Ignoring history - my speciality is reminding you of history - like there having never before in a presidential election been a red Nevada with blue Arizona (so don’t believe polls suggesting it).
Propaganda and lack of B.S. filter - perhaps the prime reason people make dumb bets; they bite on garbage polling and ignore readily available information that would cause them to second guess their bets.
Bandwagon effect - people see the chances of a particular candidate climbing because of the four reasons above, and jump on board rather than recognizing an opportunity to buy the underdog.
CASE STUDY
Last week, I called out a poll by NextGen, which has Katie Hobbs leading both main GOP gubernatorial contenders by roughly 20 points each:
On to another battleground - my sunny Arizona home.
Some readers have asked about my take on NextGen Polling’s release showing incumbent Governor Katie Hobbs (Democrat) leading her two main Republican challengers:
Leading Andy Biggs 51-32% (+19%)
Leading Karrin Taylor-Robson 51-30% (+21%)
The other two polls available for this race on the RCP website give Hobbs an average lead of 1.5%, typical for this time of year with no GOP nominee officially slated. Thanks to polling, especially ridiculous ones like NextGen’s, Polymarket’s Arizona Governor Election Winner Predictions & Odds favors Hobbs with 67% over the GOP nominee’s 34%.
These odds have nothing to do with Polymarket’s opinions; they represent the way the bets have been coming in. When Selzer threw out her phony Iowa poll, the markets ran heavily toward Harris up until Election Day. Here, if you pick the GOP nominee and buy a single share at 34 cents, a win for said nominee over Hobbs will be worth $1.00. Picking the Republican nominee (likely Andy Biggs) nearly triples your money. Someone buying Hobbs shares today stands to gain roughly 50% on the investment if she wins (or “wins”).
Some of these markets are realistic and foolish to go against. For example:
Uh, yea. The Democrats are as likely to win the Hawaii gubernatorial race through the combined powers of bad ideology and mail-in ballot collection as I am to drink three cups of black coffee typing my Substack pieces. The massive fluctuations in markets belong to the races being most manipulated by bad press and bad data.
BUT WHAT DOES HISTORY SAY?
