Many political bettors are paying the price for the Democrats’ upset of the Republican Party in the 2022 midterms, an election that many expected to go heavily in the GOP’s favor.
Prior to the Nov. 8 Election Day, political bettors on trading exchanges such as PredictIt and Smarkets had the GOP as considerable front-runners to take control of both chambers of Congress. The odds of Republicans assuming power in the US House of Representatives and Senate were given a 75% chance.
But after Pennsylvania’s Senate race went blue with Lt. Gov. John Fetterman, a significant pickup for the Democrats as the election was to replace retiring Republican Sen. Pat Toomey, the odds of the GOP winning the upper chamber lengthened. When Sen Mark Kelly (D) kept his seat in a close race in Arizona against Republican challenger Blake Masters, all eyes turned to Nevada.
With the Senate tied 49-49, and Georgia’s Senate race headed for a Dec. 6 runoff between Sen. Raphael Warnock and Republican challenger Herschel Walker, Nevada’s Senate race gained the nation’s attention.
Former Nevada Attorney General Adam Laxalt’s lead continued to dwindle as heavily Democratic Clark County, home to Las Vegas and nearly 75% of the state’s population, continued to count its votes. When the county neared its finish line, Democratic incumbent Sen. Catherine Cortez Masto pushed past Laxalt and multiple media outlets called the race in her favor.
Cortez Masto’s win retained Senate power for the Democrats, as with 50 seats the party has at minimum the tiebreaking vote with VP Kamala Harris. The Constitution designates the US vice president as the Senate president. The VP only casts a vote during tie-breaking legislative deadlocks.
Bettors Lose Bigly
Political bettors hoped to profit off the forecasted red wave. But the bettors who took stock in the underdog Democrats won big following Cortez Masto’s victory.
Though the US House is still being decided, Republicans are expected to assume power in the lower chamber. That would result in a divided Congress, with Republicans owning the House and Democrats the Senate.
Shares of a R-House and D-Senate were trading ahead of Election Day at just 24 cents. Bettors who purchased shares at that price will net 76 cents a share when PredictIt closes out the market once the House is settled.
PredictIt allows bettors to purchase up to $850 in each of its political betting markets. At 24 cents, a bettor could have acquired 3,541 shares of the Republican House and Democratic Senate scenario. That would equate to a net profit of $2,691.16 before PredictIt fees.
Republican backers, meanwhile, saw their $850 stakes in a Republican Senate and House become worthless.
2024 Even More Important
If Walker is able to unseat Warnock in Georgia, the Senate would return to its current 50-50 arrangement and heighten the importance of which party wins the presidency in two years. While some believe the 2022 midterms were a referendum against former President Donald Trump, as many of the Republican candidates he supported lost, Trump is expected to announce his intentions to seek a second stint in the White House this Tuesday, Nov. 15.
Florida Gov. Ron DeSantis (R), however, is now the 2024 betting front-runner. Political bettors give DeSantis a 33% chance of becoming president in a little more than two years. Trump is second at 24%.
President Joe Biden is third at 23%. Biden’s stock improved following the Democrats’ surprising performance last week.
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