The old saying goes “put your money where your mouth is” and I have a friend who has been betting his political analysis/opinions on the interesting website ‘PredictIt’ this week. As you can imagine, he’s had a wild week!
While I made a few friendly wagers (a bottle of wine or 6-pack of beer) with some buddies on the outcome, my friend put major $$$ on Joe Biden winning the Presidency. He invested over $500 on the website about a month ago, getting ‘Biden to Win’ for about $0.62 a share (pays $1 on a win).
At one point on Tuesday night, things were pretty stressful for him as we were texting about the early returns. By Wednesday morning, things had swung his way … and it now looks like he will walk away with a few hundred dollars in profit.
He believes there is a good deal of ‘emotional arbitrage’ in these online political markets that can be exploited in our ‘divided nation’. Shares in a ‘Biden Win’ were trading for $0.62 – far less than the ‘objective’ polling forecast (91%) on FiveThirtyEight.
It might be a rationalization, but he doesn’t view it as ‘gambling’. At least no more than betting on sports or the stock market. All of them have a significant risk beta.
Anyone else try online political prediction sites? Interested?
Image Credit: PredictIt.com