On the eve of what’s been touted as the most important American Presidential Election in decades, it’s estimated that over $1bn will have been wagered on the outcome of Trump versus Biden, none of which will have changed hands legally in the US. A missed opportunity? According to Sarbjit Bakhshi, Head of Political Markets at Smarkets, absolutely.
Speaking during a high-profile panel session at the recent Betting on Sports Europe – Digital event, Bakhshi joined Matthew Shaddick, Head of Political Betting, GVC Group, to address how the election is playing out and how markets are responding to the tumultuous political landscape.
The Smarkets man was clear in his view that should political betting go legal in the US, it would be an enormous product. “The US political system is almost a dream for bookmakers the way it’s set up,” he advised. “I mean – you’ve got primaries for both parties for every congressional senate seat, governors’ race and presidential election.
“You can probably bet down to state level in some of the bigger states like California and New York I imagine. Some of those state elections would generate enough media interest to offer betting markets on. It would be an enormous non-stop product because once the presidential cycle is out of the way you’ve got primaries coming up for midterms. You’ve got governors’ races and speculation about what Trump’s going to Tweet about and so on. No doubt in my mind it would be a huge opportunity.”
Bakhshi believes that it’s almost only by mistake that political betting is banned in the US. “It’s like the Wire Act or consumer protection,” he explained. “They don’t seem to match the political characteristics of political markets or trading. People bet on horse races because there are so many of them and they bet in high frequency and have all kinds of issues sometimes with those. Politics don’t.
“These are big, slow moving markets. The payoff is very delayed. There’s not a dopamine rush you get when you bet on an election that’s going to happen in six months’ time or a year’s time. All the things that are stopping it being legal in the US I think are mistakes and if you could recognize political betting as its own thing, the dynamics of its customer base and the movements of it would be very different.”
Aside from the player protection issue, Bakhshi considered the role that political betting would play in creating more wealth for states. “I think that the scope for tax revenues is enormous,” he said. “We know that in countries where it is illegal somehow gambling does take place so getting organized crime out of this would be fantastic. I think it’s a win-win.”
Bakhshi was also quick to emphasize the knowledge value inherent in betting on political outcomes. He noted: “People are genuinely interested in the data that we produce from our markets. We are talking to news media from around the world including the US who are interested in what the markets are saying and adding it to their existing sources of information that they have.
“Why not make it legal? Why not let Americans take part in it? I think it’s a fantastic opportunity – it is billions of dollars of revenue that we’re talking about. And it would be fascinating for the rest of the world to see what Americans think about all kinds of political bets.”
