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Donald Trump’s bid for presidency – what Paddy Power’s betting market tells us about his chances…

In fewer than eight weeks, the first votes to nominate a GOP candidate for the 2016 presidential election will be cast in Iowa. Tuesday night's Las Vegas debate was typical of the thus far wide open race for the Republican nomination. None of the participants managed to cut ahead of the pack and emerge a victor. Here's what you need to know, from Paddy Power's politics trader, Stephanie Anderson.... 

by Paul Mallon | December 16, 2015

The reality about Donald Trump’s chances

As expected, Donald Trump came under repeated attack for his controversial suggestions of recent weeks. Trump held fast to his statements during the Vegas debate, which may reveal his conviction that he is saying what the average American voter wants to hear.

He has leapfrogged so-called disaster after disaster, until observers have begun to wonder if they really are disasters or indeed calculated strikes at the Republican establishment who want to see the back of this abrasive New Yorker. One can be sure that his comments are not hot-headed errors. There is intent in Trump’s comments, and he well knows his audience.

Latest polls show another surge in Republican voter support for Trump, proving that his soundbites are not off putting to his target audience. The last ABC/Washington Post poll shows a staggering 38% for Trump, an astonishing 23 points ahead of his nearest contender, Texas Senator Ted Cruz.

These are not the figures that observers would have predicted one month ago. However, past races tell us that December poll figures can turnaround quickly once the early caucus and primary results come out.

It is for this reason that, despite a 38% rating in the nomination polls, Trump is on offer in the betting at 9/4 (approximately 28.5% chance). Rubio polls at just 12% currently, but in fact takes up 38% of the betting market at present.

This is due to the betting market incorporating general opinion that Trump’s showboating does not have the staying power required to win the all-important caucus and primary races. Iowa could prove his undoing.

That said, Trump’s odds have tumbled dramatically from 40/1 (around 1.5% chance) to 9/4 (around 28.5% chance) since the middle of this year. He has commanded a whopping 23% of the overall nomination market stakes, and an even more impressive 42% of stakes since the November 10 Milwaukee debate. Currently, a Trump win would mean a Paddy Power loss.  It’s not an exaggeration to say the bookies are on the back foot. It was expected that Trump would have hit a ceiling by this stage in the nomination process. He has outstayed his expectations.

Republican nomination market since December 2012 (where the money is going…)

  • Trump 23%
  • Rubio 23%
  • Bush 20%
  • Cruz 9%
  • Paul 5%
  • Christie 4%

Republican Nomination cash since November 10, 2015

  • Trump 42%
  • Rubio 25%
  • Cruz 18%
  • Christie 10%
  • Bush 0.5%
  • Paul 0%

Cruz control? Hardly…

Ahead of the Las Vegas debate, many anticipated an attack by Trump on Cruz following the latter’s new lead in the Iowa caucus polls – not the news that Trump wanted to get ahead of the final debate of the year. Ted Cruz also privately suggested that Trump’s star was likely to fade soon – which has been a pervasive assumption throughout the nomination process, not yet materialised. Trump’s polling figures are holding up.

The attack never materialised, viewers noting that the two practically winked and nodded in a continuance of their tactical accord. Make no mistake, though – where Trump is involved, it is bound to be a calculated strategy.

Cruz’s grass roots conservative support is as much a rejection of the established GOP candidates as Trump’s support is. Each is an anti-establishment candidate, but in slightly different ways. Cruz appeals to the evangelical Christian contingent, whereas Trump is targeting the blue collar vote. One gets the feeling that Trump’s camp is treading carefully where criticism of Cruz is concerned. Perhaps they will leave that task to others for the time being.

Marco Rubio vs Ted Cruz

The showdown between these candidates illustrates much of the current disunity in the Republican Party at large. Immigration, security and foreign policy. Many that have predicted Trump’s early bath also predict that the final GOP nomination battle will boil down to these two senators.

In the latest debate, Rubio attempted to discredit Cruz’s claims of hard line conservatism, as expected. Cruz replied by accusing Rubio of being too comfortable with the Republican establishment, as expected again. In the end, neither candidate appeared able to gain ground on the other.

The current market estimates a 37% chance for Rubio (odds of 6/4), and 22.5% for Cruz (odds of 3/1). Rubio’s odds have remained largely unchanged since the end of October, but Ted Cruz was on offer at 10/1 at that time. His odds have shortened at the expense of runners such as Jeb Bush (now himself 10/1, out from 6/4). The number of individual bets on Cruz has tripled since mid October, the total stakes on him surpassing all but Trump, Rubio and Bush. Not bad for someone who was regularly polling at single figures two months ago.

Christie and New Hampshire

New Jersey Governor Chris Christie’s resurgent polling figures in New Hampshire show that he was right to put a lot of his eggs in that particular basket. He is currently polling at 10%, up from 2% at the start of September, and in that time his odds to win the primary have dropped from 22/1 (around 2.25% chance) to 9/4 (around 28.5% chance), accounting for his camp’s potential to snowball more support in the Granite State.

Christie was back on the main stage for the Las Vegas debate, having been relegated to the secondary debate in Milwaukee due to poor polling figures.

He is now 10/1 to become the nominee, in from 25/1 a few weeks ago. The betting pattern certainly fits, with punters shying away for most of September and October. Despite the generous odds, only a handful of bets laid on Christie during that time. However, since the improvement in New Hampshire, the punters are back on board with several three figure sums placed ahead of the Las Vegas debate.

There is, of course, a danger of Christie suffering an early blow in Iowa, and his current 10/1 offer takes account of this.

The New Jersey Governor polls well in Clinton vs Christie match ups, and it’s almost unnecessary to say that Christie has the best potential to lure centrist voters away from Clinton. The question is over whether Christie can persuade the Republican grass roots voters to put him forward. So far, they have not been shy about championing more extreme conservative candidates such as Trump and Cruz.

…and the rest

Former Florida Governor Jeb Bush was no shrinking violet in the Vegas debate. He landed various punches, particularly with regard to taking Trump to task. The unflappable business magnate will no doubt shake them off easily considering Jeb’s current 5% standing in the overall polling.

Runners previously showing well in the polls, such as Ben Carson, Carly Fiorina and John Kasich, have dropped off and are available at 66/1 bar. Make no mistake – this is a wide open field!

Overall race

Hillary Clinton is a very short 1/12 to bag the Democratic nomination, her only real opponent being Bernie Sanders at 6/1.

In terms of which party will provide the next president, the Democrats are 8/13 (around 59% chance) and the Republicans 6/5. This is has wavered only minimally over the last three years. The punters’ investments match that picture, with 58% of total stakes so far having been placed on the Democrats to provide the winner.

This means that in the overall market, Clinton can be found at 8/11 to win the presidency – about a 55.5% chance.

Winning Party odds

  • 8/13 Democrats
  • 6/5 Republicans

Democratic nomination

  • 1/12 Hillary Clinton
  • 6/1 Bernie Sanders
  • 50/1 Bar

Republican nomination

  • 6/4 Marco Rubio
  • 9/4 Donald Trump
  • 3/1 Ted Cruz
  • 10/1 Chris Christie
  • 10/1 Jeb Bush
  • 66/1 Bar

Winning candidate

  • 8/11 Hillary Clinton
  • 9/2 Marco Rubio
  • 6/1 Donald Trump
  • 9/1 Ted Cruz
  • 18/1 Bernie Sanders
  • 22/1 Chris Christie
  • 22/1 Jeb Bush
  • 50/1 Bar

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