Monday, November 3, 2008

The Most Accurate Election Forecast

Keith Thomson, HuffPo is off to the races...

I asked him: "Do you think handicappers can forecast the outcome of the presidential election better than polls?"

He didn't hesitate. "Polls can be inaccurate. People may say what is politically correct, the questions may be leading, the pollsters may be biased. A pollster can still bill for an inaccurate poll. Bookmakers must make an accurate line or they lose -- period."

For a second opinion I went to Ray Paulick, who was a protégé of notorious oddsmaker "Jimmy The Greek" before becoming a handicapper for the Daily Racing Form. Now he's editor of the thoroughbred industry insiders' must-read Paulick Report. "Gamblers have more experience with cheaters," he said. "They take voter fraud into their metrics. Polls don't. Nor do polls take into account how each state's secretary of state factors in, or systems within a state designed to eliminate voters; Jimmy the Greek called these 'the intangibles.'"

The multi-billion dollar online gaming industry offers evidence that Maloney and Paulick are, as usual, on the money.

With University of Arizona economist Paul Rhode, Strumpf authored a study -- "Historical Presidential Betting Markets," published in Journal of Economic Perspectives -- that demonstrates that the betting market's forecasting superiority is nothing new.

Currently, Betfair lists Barack Obama as an overwhelming 1-7 favorite (paying $8 for a $7 winning bet). A John McCain win would pay $6.80 for every dollar bet.

So...the best outcome is the worst bet. Amazing...

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