Students Bet On Election Outcome

As the presidential election approaches, some College students are using online betting sites to profit from their political expertise.

Andy J. Frank ’05, president of the Harvard College Democrats, said he has been placing political bets on tradesports.com for over a year.

“It is fun because then you have a little more stake in it beyond just who is going to win,” Frank said. “It shows that you really believe what you’re saying.”

Frank is one of thousands of politically-charged bettors who flock to tradesports.com, a Dublin-based online trading exchange for economic, sporting and political events, to try their luck at predicting this year’s election.

“We will process about three million contracts this month,” Mike Knesevitch, spokesman for tradesports.com, said. “That’s a lot of trading.”

Knesevitch said that about 25 percent of the contracts—or bets—are political, and that many of those bettors are college students.

Associate Professor of Government Barry C. Burden said that these online betting markets are often a more accurate gauge of an election’s outcome than public opinion polls.

According to yesterday’s tradesports.com contract prices, Bush is beating Kerry 56 percent to 44 percent.

“The polls are more volatile. They respond to every event, every debate, every mistake made,” said Burden. “The monetary markets tend to be more stable.”.

Knesevitch said that this stability reflects the bettors’ concern for their money.

“Tradesports.com has over 40,000 members who put their money where their mouth is, and because of this, they educate themselves much more about the issues than others who don’t have that financial interest,” Knesevitch said.

Burden said he thinks the presidential primary campaign of Howard Dean, which relied heavily on the internet to garner youth support, has attracted a more diverse group of bettors.

“There may be a Republican bias because they have access to the internet and money to spend, but now that’s offset by the number of young liberals online,” he said.

Joshua A. Barro ’05, member of the Harvard Republican Club, said that he opened up an account with tradesports.com over the summer.

“I’m not that confident in my predictions,” Barro, who is currently at a loss of about $8, said. “It’s really more for fun than to get rich.”

Barro said he has bet that President Bush will win Pennsylvania—but he bets with his head, not his political leanings.

“I’m not betting for who I prefer: that leads to poor betting,” Barro said. “My bets are much more about who is more likely to win.”

Knesevitch said that this objective strategy is common among online political gamblers.

“Tradesports asks a very different question than public opinion polls. Not who are you going to vote for, but who do you think is going to win,” Knesevitch said.

But Frank said that the online betting is both a show of support for one’s favorite candidates and an attempt to profit from their future win.

“You presumably wouldn’t be supporting someone unless you think they’re going to win,” Frank said.

According to Burden, the Iowa Electronic Futures Market—a real-money market where bettors can buy futures contracts based on the outcome of economic and political events—is more popular among academics.

On the Iowa Electronic Futures Market, Bush has 51 percent of the support.

“I would guess that the Iowa market is closer to the truth because it’s more likely to be academics whereas tradesports is more likely to be people who are just excited about the elections,” Burden said.

Institute of Politics President Ilan T. Graff ’05 said that the student involvement with online betting shows the enthusiasm young people have for this election.

“It’s another gateway for young people to get involved,” Graff said.

Bush’s slight lead in the money markets has led some to celebrate.

“I think that’s promising for us,” said Lauren K. Truesdell ’06, spokeswoman for the Harvard Republican Club. “Because no one’s going to bet on someone if they don’t actually think they’re going to win.”