Political betting within the US is a very specific market, just like it is in any other country. Political betting is a variation of prop or novelty bet. A “prop bet” or “novelty bet” is a type of bet that permits betting on the outcome of a non-sporting event. Such events can be political events such as elections, or talent contests like the Idols or the X-Factor, awards ceremonies like the Grammys or Oscars, the gender of a baby born to a celebrity or royal couple, or some events in popular culture.
Bookmakers can offer bets on literally anything, but some may get themselves into hot water for setting some politically incorrect betting options. Novelty bets are harder to predict, measure, and identify. This means that probability calculations are more difficult to use. It’s not so easy to come up with accurate odds for this type of bet, so the bettors and the bookmakers are on even ground.
An approach that is suitable for the UK actually works a bit differently in the US. In the UK, which has a long history of sports betting, political betting is legally considered a prop bet or a novelty bet. Even the Parliamentary and Royal Family are still fringe options, as they don’t relate to the coverage of any Presidential elections in the US. The US Presidential Election is more significant than any political event in Europe; and that’s why it attracts much more interest. But at the same time, it also carries some regulatory implications.
In the US, the Department of Gaming Enforcement must approve any event that is on offer, and the Department is very selective. Due to the areas of consideration they focus on, they won’t allow a lot of betting on political events. Another factor why political betting isn’t such a thrilling pursuit over there is that gambling, in general, is affected to a considerable degree by dynamic content and live events. Presidential Election and Democratic Convention do not generate any events or contests.
Political betting seems more like a PR-related or novelty bet. Some professionals in the betting business don’t consider political betting to be a material revenue generator, especially taking into account all the regulatory implications, and so they don’t encourage bettors to bet on political events.
As for sports betting, this only became legal in Las Vegas during the past couple of decades, and indeed in all the other states, after the overturning of the PASPA, Professional and Amateur Sports Protection Act, in 2018. This means that there hasn’t been any significant election campaign since the legalization of sports betting. The first is coming soon, but there’s not much action to be observed yet. Closer to November, more requests on political betting are going to appear, which may allow for betting on these event types. Another issue for betting operators is that offering these bets means taking a political stand or finding yourself taking a political position. It may not be so beneficial for the business in the long run.
Most sportsbook operators have qualified traders who know how to place a sporting bet, or else how to derive an appropriate price. But in the case of other events, it looks like trying to place bets on the weather. If the betting operator opts for offering this type of novelty bets, the company ought to reduce the risk by offering a limited size or number of bets. Another option is offering it as a promotional activity, and cap it as such. The betting operators are in the same conditions as the bettors, that’s why it is a field where you can try to get an advantage over the house.
There are no sportsbook operators that are proficient in political campaign pricing, because this is in a totally different sector. It should be priced not on actual content, but commercial considerations; because it can risk attracting the wrong kind of attention.
This type of bet creates some positive excitement and intrigue; it is the reason why betting operators introduce them. It can be compared to a singular event, just like the Super Bowl. It is an event that draws quite a lot of attention, and it’s going to be the first bet for many new players. The sports betting operators always prefer a more massive selection of events on top of one single game, no matter how popular it might be!
The election outcome may also drive you significantly into the red. As a single event, it can create a lot of attraction as a marketing event. So then the betting operators need to think about how to cross-sell the people that have placed a bet on the Presidential campaign towards actual sports betting.
Betting operators bear a high risk from a PR and financial perspective, as the direct commercial benefit from the single bet may be limited. Yet at the same time, the political backlash is quite real.
While the prediction of sports events is based on binary results, i.e. whether your team won or not, you yourself were either over or under. In case of political events, it’s more difficult to determine the results, as they can become more complicated. The political events are a bit tricky to quantify and put them into terms acceptable to both players and regulators. This is much less predictable, and you can be considered an outlier if you don’t manage to translate the outcomes into the language of sports betting and gaming.
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