Like many US political watchers, a Nevada resident named Domer had an opinion about who would emerge from turmoil within the Republican Party to become the next speaker of the US House of Representatives.
Unlike most of them, he made US$13,000 when Mike Johnson was finally elected last month.
That political gambling is illegal in the US has not deterred Domer (a nickname he provided) or others like him from using online overseas markets to wager on US politics.
Photo: AFP
Domer, who said he earns about US$500,000 a year betting on politics across the globe including in Italy and South Africa, is often active in chatrooms on Discord and other sites that buzz with debate among aficionados.
“There’s a lot of trash talk — it’s similar to sports betting,” he said. “It’s combative and congenial at the same time.”
Political betting was common — and legal — in the US until the rise of relatively accurate polling in the 1930s.
Futures trading regulations passed in 1936, as well as crackdowns on sports betting and the perception of gambling as seedy all helped put an end to markets that once populated Wall Street and the politics pages of newspapers.
Today, critics still worry gambling could fuel corruption or the gamification of the political system.
However, as the Internet has made gambling easier, people like Domer use virtual private networks to skirt around government regulators that have closed down sites or halted the entry of platforms that try to offer political betting to Americans.
Only two have been able to stay alive, due to their affiliations with university research projects.
The government moved last year to shut down one of them, PredictIt, alleging it had exceeded its research-focused mandate. It was granted a lifeline by a July court decision in its favor that would keep its lights on as litigation continues.
Supporters say legal markets offer benefits to the public and traders alike, and the effect is negligible as bets are capped at a few hundred dollars.
“These markets encourage attention to political events, and they serve as an antidote to fake news,” PredictIt CEO John Phillips said.
“Prediction markets are not perfect,” he said, but they are “better than polling.”
There are studies backing him up, although it is a contention that not all political scientists agree with. For better or worse, journalists stick almost exclusively with polls — which, traders say, also inform their bets.
PredictIt is currently offering shares in US President Joe Biden being a presidential nominee for US$0.68, meaning a trader who bought a share would earn US$0.32 if he is the Democratic candidate in next year’s election, which is likely.
However, bet big on California Governor Gavin Newsom, who has not even entered the race, and each share bought for US$0.23 would earn US$0.77, minus fees.
Markets also deliver insights that polls do not always capture — not just about politics, but also economics, said Tom Gruca, director of the Iowa Electronic Markets, a political betting operation run at the University of Iowa, where he also teaches.
“When you answer a poll, you tell people what you wish is going to happen,” unlike a market, which captures “what you think is going to happen,” he said.
“Even a small amount of money changes the stakes for people,” Gruca said, describing a class where, after giving students money to trade, they were “ready to rip each other limb from limb over movements of US$0.10.”
Political gambling expert Pratik Chougule also cashed in on a House speaker bet, cleaning up US$130 after Jim Jordan lost, and has most recently put about US$1,000 into Biden being the Democratic nominee.
Chougule cohosts a betting podcast, and started an advocacy group to push for legalization.
“I was a pretty true believer in the Iraq war... I had gotten that issue very wrong,” Chougule said. “I basically realized that bad prediction, bad forecasting in our policymaking is actually the norm, not the exception.”
“Having skin in the game is at least an important consideration in doing better,” he added.
For markets to work — for academic insights to be gleaned and riches to be won — there must also be losers.
“I’m currently betting a lot of money that [former US president Donald] Trump will not be the GOP [Republican] nominee — which was what I thought was a smart bet a year ago, and is now looking like the world’s dumbest bet ever,” Domer said.
Despite — or perhaps, because of — the court indictments stacking up against the former president, he looks almost certain to grab the Republican presidential nomination.
So just how dumb was Domer’s bet?
“Oh, I’m gonna lose a couple hundred thousand,” he said.
UNPRECEDENTED PACE: Micron Technology has announced plans to expand manufacturing capabilities with the acquisition of a new chip plant in Miaoli Micron Technology Inc unveiled a newly acquired chip plant in Miaoli County yesterday, as the company expands capacity to meet growing demand for advanced DRAM chips, including high-bandwidth memory chips amid the artificial intelligence boom. The plant in Miaoli County’s Tongluo Township (銅鑼), which Micron acquired from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion, is expected to make a sizeable capacity contribution to the company from fiscal 2028, the company said in a statement. It would be an extended production site of Micron’s large-scale manufacturing hub in Taichung, the company said. As the global semiconductor industry is racing to reach US$1 trillion
ABOVE LEGAL REQUIREMENT: The Ministry of Economic Affairs is prepared if LNG supply is disrupted, with more than the legal requirement of 11 days of inventory Taiwan has largely secured liquefied natural gas (LNG) supplies through May and arranged about half of June’s supply, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. Since the Middle East conflict began on Feb. 28, Taiwan’s LNG inventories have remained more than 12 days, exceeding the legal requirement of 11 days, indicating no major supply concerns for domestic gas and electricity, Kung said at a meeting of the legislature’s Economics Committee in Taipei. The ministry aims to increase the figure to 14 days by the end of next year, he said. While one or two LNG or crude oil shipments for May
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
RSS