Betting on politics: US mid-term election markets are increasing

US capitol building

I’ve been following the betting on the US mid-term elections over the past few weeks, and I’m pleased to see the number of markets has been increasing. In addition to allowing you to bet on control of both the Senate and the House, as well as the individual Senate seats, Betfair (Betfair.com) is now running markets on the outcome of the race for the governorships of New York, Illinois and Georgia.

While this is pretty good, even this effort pales in comparison with its rival Smarkets (Smarkets.com), which is offering markets on all 36 gubernatorial contests (although the market on the Oregon election is currently halted). What’s more, it is also offering markets on what it considers to be 50 key Congressional races in states ranging from California to Vermont. Finally, it is offering markets on the range of seats that both the Democrats and Republicans can expect to get.

Of course, the big downside to Smarkets’ offerings (as well as many of Betfair’s) is that many of these markets are very thinly traded. I don’t have any hard and fast rule, but I wouldn’t normally consider a market to be liquid enough until at least £500 has been traded or £100 is behind a price (both Betfair and Smarkets reveal how much money is behind a specific price). This rule is designed to prevent me making tips that are impossible to follow through on. Sadly, this eliminates most of Smarkets’ bets for now. However, with the voting less than two months away, this may yet change.