If you go to Las Vegas and gamble, you will probably lose money. If you keep betting, you will certainly lose money and a lot of it. That’s because everything from blackjack to roulette to slot machines have negative expectation, meaning you are guaranteed to lose in the long term.
Not so with real life events, like the outcome of a election. The thing is, unlike in casinos, we do have a lot of relevant information here — opinion polls, previous trends, demographics, events. You would think that most betters (and consequently the betting company setting the odds) will take these into account. The reason that does not happen is that most people are simultaneously passionate about their preferred candidate and politically ill-informed. Even those who take a look at the opinion polls rarely do it at sites like Five Thirty Eight, but instead rely on a few polls highlighted by the main-stream media. For instance, everyone knows today that Obama is almost surely winning the election and very likely also winning red states like Virginia and Florida. The thing is, these facts were obvious even three weeks ago, if you did the appropriate trend-line analyses. But when I bet some money (actually quite a bit) then, I got astoundingly good odds on Florida and pretty good ones even on the overall result!
So the purport of my message is this: If you are a political junkie like me, bet. You will make a lot of money at the expense of less-informed mortals.
And since I am bragging, let me remind the reader of two predictions I made a fair while ago, at a time when it must have appeared rather bold. Now though, I think even Rush Limbaugh would agree with it.