Biden’s Too Old, Trump Gets Convicted, Dems Take Congress

It would appear Nashville Power Pollers are much in line with the rest of the nation, as their responses seem to mirror national polling trends. To wit:

• A strong plurality indicate that as Republicans in the U.S. House escalate from family feud to code-red wipeout, the more likely it is that Democrats become the majority party after the 2024 elections. Only 35% believe Republicans will keep their majority; 50% say they won’t.

• The shuffled gait, the garbled words, the vague look in his eyes all lead Power Pollers to believe our president, Joe Biden, is too old to be running for president again. It’s not even close—64% say that is the case.

• Former President Donald Trump’s prospects of staying ahead of the law are not good. They look particularly bad down in Atlanta with Sidney Powell’s guilty plea this week. Over seven in 10 Power Pollers predict he will be convicted before the November presidential election in ’24.

• Finally, Power Pollers keep a tight rein on their disposable funds. Only 12% have ever made a bet among friends on a political race, or otherwise made a bet on one of the new betting platforms that often feature politically related subjects. I guess very few Power Pollers were wandering around the newsroom of the Nashville Banner in the late ‘80s. More on political betting later.

Here are the specific questions and answers to our October Power Poll:

CONTEXT

Much of this Power Poll survey could be better explained by simple reads of The Wall Street Journal or New York Times. I don’t purport to be a national reporter. So here I want to focus on our question regarding gambling on politics. I have studied development in that field a bit and find what is going on to be an incredibly fascinating little development in American economics and government.

Not long ago, the federal agency charged with regulating futures trading—The Commodity Futures Trading Commission—essentially granted a company called PredictIt (predictit.com) permission to trade on future events. On PredictIt today you can trade on Joe Biden vs. Donald Trump for president in ’24, who’s going to win the Iowa Republican caucus, and which party is going to take Georgia. Predictit was in large measure allowed to enter this politics betting space because it is nonprofit, places low limits on bets, is headquartered with a university in New Zealand, and has supposed educational benefits.

Meanwhile, enter a New York-based company called Kalshi.com, which to my eyes at least has taken things to a higher level by promising an entire marketplace of futures-based events, not only in politics but as relates to next week’s weather in Chicago, Federal Reserve announcements, inflation rates, and more. Well financed and filled with young programming geniuses, the company’s boilerplate reads: “Event contracts are an asset class that give investors the ability to trade directly on their opinions about a specific yes-or-no question. Event contracts offer direct exposure to or a hedge to a wide range of risks including inflation, fed rates, debt ceiling, recessions, student loans, politics, climate and weather, and more.”

In other words, Kalshi is more than just jumping on a sports betting app and having fun with a $2 wager. Kalshi is a way to financially hedge against a future event that might not go your way. The company founder thought this up from the trading floor where he worked at Goldman. Consider: If you think the re-election of Biden is going to cost your company hundreds of million of dollars because he will prevent you from drilling in Alaska, hedge that loss with a bet on his election at Kalshi. Cover your anticipated revenue shortfall by betting a similarly large amount that he will win. Follow?

Kalshi was recently turned down by the Commodity Futures Trading Commission to pose more explicity political questions. Specifically, Kalshi wanted to ask what party would control Congress in the future. It’s not the end of the world for Kalshi. It’s not the end of the world for the betting public either. You can pretty much bet on anything politically related from numerous other countries in the world. Just set up your betting LLC in the Bahamas, fill an offshore bank account with some money, and bet away on a Chinese prediction market.

Those in the prediction market business are of the opinion that the data in their exchanges produces predictions that are spot-on. Because when people bet actual dollars on event outcomes, the predictions of those outcomes are made with real dollars at stake. Putting money on the line means one’s convictions and knowledge are greater. So, many contend that these markets are a more accurate means of predicting the future than traditional polling, for instance.

Now, opponents will tell you that the problem is the potential for corruption. Do we want to allow betting on politics as a general rule? How do we regulate the industry so that people can’t corrupt the system in order to win a bet? Questions abound. A number of Democratic U.S. senators have concerns and have voiced them. Generally speaking, Republicans have greater faith in prediction markets and favor their expansion.

Over $3 billion was wagered in 2022 on online sports betting sites in Tennessee. I think the genie has drifted out of the bottle with regard to event prediction markets generally and political wagering specifically. Frankly, I can imagine that in the not-too-distant future, we’ll be betting on whatever you want to bet on. Freddie O'Connell vs. Alice Rolli. Anything.

BY THE WAY: Look for a Power Poll invitation to a panel discussion in which we will discuss sports betting in Tennessee and prediction markets more generally. PANELISTS INCLUDE: Eliana Eskinazi, senior director at Yahoo and co-founder of Wagr, a social sports betting startup headquartered in Nashville, which was recently acquired by Yahoo; Harry Crane, Franklin resident, professor of probability and statistics at Rutgers, and one of the nation’s leading gambling authorities; and, hopefully, a representative from our own Tennessee Sports Wagering Council. Thanks!