- Impeachment is a rare event, and so we lack a lot of the traditional forecasting strategies used to figure out what's going to happen.
- This is a great time to study betting markets and oddsmakers: when people are betting their money on a proposition, we get an implicit value of how likely or unlikely an event can be.
- Betting sites think that an impeachment is likely.
- But the market tends to think that Trump still has a pretty good chance of coming out of this with his presidency intact.
- Online betting sites, traditionally destinations for sports wagers, have under the Trump administration seen betting on
politics and elections evolve from a just-for-fun niche into substantial markets. - With services like PredictIt, we can figure out what the market thinks the probability of impeachment is the same way we'd use the stock market to determine the value of a company.
A storm of impeachment-related intrigue besieges the nation's capitol. Congressional Democrats are assembling a case for the removal of President Trump, and the future of the administration hangs in the balance.
So naturally, there's a bunch of people on the internet trying to make money by gambling on how that will pan our.
Whether they're more established bookmakers like Dublin's Paddy Power or upstart prediction markets like PredictIt, there are plenty of ways to turn Washington's political troubles into cold hard cash. (It's illegal to place wagers on betting sites located in the US, which is why many of these sites are based in Ireland and the UK.)
"Look, I can't get into specific volumes," said Joe Lee, the head of Trump betting at Paddy Power Betfair, "but I can tell you that the impeachment market is probably in the top three in terms of volume that we're seeing among the Trump propositions."
As it stands, Paddy Power's users put the odds of impeachment at around 20%. They believe there's an 8% chance Trump will resign, and an 81% chance the president will actually complete his first term.
Rep. Adam Schiff, the chairman of the House Intelligence Committee, who led the Democrat's impeachment inquiry.
Rep. Adam Schiff, the chairman of the House Intelligence Committee, who led the Democrat's impeachment inquiry.
Sports betting sites do a brisk business in election and impeachment gambling
The Trump candidacy and subsequent administration has been a boon for oddsmakers attempting to capitalize on both the riveting nature of the former reality star's tenure, as well as the frequent uncertainty regarding his presidency.
"We opened up impeachment markets pretty much straight away once Trump got elected," Paddy Power's Lee said. Those markets, long dormant, have been particularly volatile over the past two months.
Will Jennings, the head of public engagement at PredictIt, has seen a similar uptick in impeachment betting.
"This is one of our more liquid and high-interest markets on the site," Jennings said.
While still not as busy as the election-related bets - the Democratic nomination is a particularly high-volume wager at this time, and across the whole company Paddy Power Betfair saw over one million wagers on the 2016 election - the existence of people willing to put their money where their mouth is can offer some guidance to people trying to make heads or tails of the current state of politics.
What's going to happen with impeachment? Maybe gamblers know.
PredictIt's users, it seems, have the odds on Trump's impeachment - and they've thought of every possible outcome. According to users:
- There was a 40% chance of impeachment in 2019.
- There was a 78% chance of impeachment in his first term.
- There was a 21% implied chance Trump resigns in his first term.
- There was a 22% implied chance Trump is convicted in a trial in the Senate.
The price of each of those bets was determined by thousands of transactions each and every day. And those four stats alone can help us determine exactly how the market perceives the risks of impeachment for the Trump presidency. Here's what it looks like.
Skye Gould/Business Insider
Those will change - in the past week, the implied probability of impeachment in 2019 fell by 4 percentage points, though the implied probability of impeachment within the first term rose a point, indicating that the market's perception of the timeline of impeachment may be shifting.
Still, it illustrates the peril for both the President and his allies in Congress. According to these stats:
- Impeachment is more likely than not at this point.
- There's a 56% chance that impeachment will come down to a trial and vote in the Senate.
- There's a 34% chance that the inquiry ends with an acquittal following such a trial, which will put vulnerable purple state Republicans potentially at risk of having to justify that vote following a messy trial.
- For Democrats, there's a 22% chance this ends with a failure to impeach.
While nobody truly knows how this will unfold, having the general chances as perceived by betting markets laid out gives you an idea of how the public feels about impeachment - and what they expect in the weeks and months to come.
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