Aug

24

American Odds

August 24, 2020 |

Alex Castaldo writes: 

On this web site https://www.oddsshark.com/politics/2020-usa-presidential-odds-futures the American Odds for Biden to win are quoted as -135 and for Trump +115

For those not familiar with America Odds here is how you convert AO to a probability

if AO < 0:

   prob = |AO| / ( |AO| + 100)

else

  prob = 100 / (AO + 100)

So the probability for Biden is 135/235 = 0.574

and for Trump 100/215 = 0.465  

Richard Owen writes: 

What is the origin of the AO format? It was deemed more accessible to punters to speak in terms of $100 units? Is the negative sign subconsciously in front of the favourite to dissuade people from betting the favourite? Old school bookrunners tended to be overweight the favourite winning, but now tend to be hedged?

Stefan Jovanovich writes: 

I hate to disagree with Jeff about anything regarding gambling, but he is ignoring what he knows about hedging.  The amount of money actually bet online on  American politics is - at most - a tiny fraction of what is wagered on sports.  The success of DraftKings alone confirms this.

https://sportsbook.draftkings.com/help/sports-betting/where-is-sports-betting-legal

The line on Predict-It and other politics wagering sites can be moved with a bet that will have zero effect on any of the dozen parlays that are offered for the next Liverpool match.  Since the actual wagering does not need to be balanced by the bookies, they can set whatever line will attract the most attention and give them the most publicity and general  traffic.   Political odds are used the way Sam Walton used the stacks of peanut brittle when he started with his J. C. Penney stores.  He put them on the sidewalk or just inside the entrance and the people walking/driving down Main Street have to take a look.  

Biden and his odds are the peanut brittle.  Odds favoring Trump would have the opposite emotional effect.


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