For gamblers, Obama was a sure bet

2012-11-08 15:00
(File, AP)

(File, AP)

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

New York - While most pollsters had declared the US presidential election too close to call before Tuesday, many gamblers had pegged the winner early and got it right.

On 4 November, two days before US voters went to the polls to choose their next president, Irish bookmaker Paddy Power said it would pay out $650 000 to those who bet President Barack Obama would keep his job.

The odds, which had fallen to two-to-nine for Obama, were just too hard to ignore, and 75% of the money staked on the election favored the Democratic incumbent over Republican challenger Mitt Romney.

"We paid out early as we like to have a bit of fun and give our customers an added incentive to bet with us," said Claire Davies, a Paddy Power representative.

On Sunday, the Dublin-based firm took out a controversial half-page advertisement in The Irish Times, stating, "Sorry Romney, you're not black or cool. We're paying out early for an Obama victory."

Online prediction market Intrade, also headquartered in Dublin, opened on Tuesday showing Obama with a 68.2% chance of getting re-elected.

Better than exit polls

"The market, pretty much from day one, was confident of Obama getting a second term," said Carl Wolfenden, exchange operations manager at the firm.

Intrade - which offers futures markets on everything from how high the price of fuel might go, to who will win best picture at the Academy Awards - showed Obama's chances for re-election at over 80% in early September. That slipped in October to the 60 to 65% range.

Around 6 000 traders, three-quarters of whom were American, with the rest in Europe and Canada, bought a total of 4.1 million shares on Obama. Each share for Obama paid out $10. The 3.4 million shares traded on Romney did not pay out.

"When you put your money up there, you are basically saying it isn't who you want to win, but who you think will win, so it gives it a little bit more weight," said Luke Rahbari, a partner at Stutland Volatility Group, which runs a hedge fund platform that trades volatility of equities and commodities.

"It's probably better than the exit polls," he said, adding that he has not traded on Intrade but looks to it to see where money is flowing.

While the clients who put money on Obama at the betting firms were getting paid, many investors in the US stock markets were taking losses. The Dow Jones industrial average slumped more than 300 points, or 2.36%, on Wednesday.

Fiscal cliff predictions

"Considering that the end result of the election is the status quo, there are questions over whether we can forge a bipartisan agreement to solve the 'fiscal cliff' issue," said Phil Orlando, chief market strategist for equities at Federated Investors Inc of Pittsburgh.

The fiscal cliff refers to the $600bn package of US tax increases and spending cuts that begin to kick in at the start of 2013 and could push the country into recession, unless the Obama administration and the Republican-controlled House of Representatives can reach a deal.

Intrade said it plans to offer a market on fiscal cliff predictions in the near future.

Paddy Power, meanwhile, was already offering odds on the winner of the 2016 US presidential election.

On Wednesday, Secretary of State Hillary Clinton and Romney running mate Paul Ryan were both at seven-to-one odds, while Romney himself and Vice President Joe Biden were further down the list of 18 potential contenders at 16 to one and 25 to one, respectively. Donald Trump was the long shot rounding out the list, at 100 to one.

Read more on:    barack obama  |  mitt romney  |  us  |  us elections 2012
NEXT ON NEWS24X
SHARE:

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
/News
 

Joburg hot spots for cocktails, craft beer, tapas and wine!

It’s the season to be jolly – so we’ve rounded up some new Joburg hot spots!

 
 

I love summer.24

The craziest deaths of 2014
How to make this a sensual, sexy summer!
This is what South Africans Googled in 2014!
This hilarious song is your new holiday anthem

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Kalahari.com - shop online today

2DAYS ONLY – 30% off Appliances

Coffee makers, blenders, fans, juicers and more. T&Cs apply. Shop now!

2 DAYS ONLY – 40% off books

Get 40% off when you buy 2 books. For two days only! T&Cs apply. Buy now!

Up to 50% off on outdoor gear

Save on chairs, blankets, cooler bags, umbrellas and more. Shop now!

Save on Samsung

Cameras, mobile phones, TVs, Tablets and more. While stocks last. Shop now!

Grand Theft Auto 5

Now available on PS4, Xbox One and PC from R649. Buy now!

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

Horoscopes
Aquarius
Aquarius

There is so much going on around you and inside your head. You may want to take your ideas to the next level. Romance may be...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.