As Election Day approaches, the two presidential candidates are neck and neck again, as they were in 2000. And as in the previous election, the outcome could depend on what happens in Florida.
If you thought 2000 was an exciting year for presidential politics, prepare for more of the same in 2004. With the election four months away, several online wagering sites are forecasting that this year's race will stack up much the same as the 2000 runoff between George W. Bush and Al Gore.
Just like last time, Bush holds sway in the South and Midwest. The Democratic challenger, John Kerry, maintains a comfortable lead in the Northeast and along the West Coast. The leading indicators show the race could all boil down to the nation's fourth-most-populous state, Florida, where polls show Bush running dead even with Kerry.
The predictions for a too-close-to-call race are a marked change from a few months ago, when Bush was favored to win re-election.
Bush's odds of victory have "basically been around 50 percent, though it's been staying just below the line for a while now," said Emile Servan-Schreiber, chief executive of NewsFutures, a site where people place wagers on elections and other events to win prizes. As of Monday, NewsFutures traders were giving Bush a 47 percent chance of winning re-election.
The odds on NewsFutures aren't far off from those posted on two other exchanges in which players bet real money on the expected election outcome. At the Iowa Electronic Markets, an exchange run by the University of Iowa that allows participants to wager up to $500 predicting the election outcome, Bush and Kerry each have a 50 percent likelihood of winning. At TradeSports.com, a wagering site based in Ireland that has no betting limits, Bush's odds of winning are slightly higher, at 52 percent, compared with 48 percent for Kerry.
Recent events, including Kerry's pick of John Edwards – a smooth-talking former trial lawyer and North Carolina senator – as his running mate have helped the Democrats' odds of victory, exchange operators said.
Joan Berg, an accounting professor at the University of Iowa's Tippie School of Business who helps operate the exchange, said Kerry's announcement last week didn't have a huge impact on victory odds, since Edwards was already perceived as the favorite. But it was definitely a plus for his campaign.
"What our prices are saying is that traders believe that was a good choice for Kerry," Berg said, noting that his odds rose immediately following the Edwards announcement.
Lest memory be deceptive, however, exchange operators say any reversal in current events can rapidly change public opinion. It was only a few months ago, after all, that headlines were working in Bush's favor.
Servan-Schreiber said he recalls Bush was sitting pretty last November, against a backdrop of improving economic data and a widespread belief that former Vermont Gov. Howard Dean – a candidate who described himself as representing "the Democratic wing of the Democratic party" – would win his party's nomination.
When news of Saddam Hussein's capture hit the airwaves in December, odds of a Bush victory hit their highest level in months. On TradeSports, where Bush has typically posted higher odds of winning than on other exchanges, the likelihood of his re-election peaked at 74 percent in early January.
As the year progressed, the outlook for Bush turned bleaker, particularly after Democrats tapped John Kerry, a decorated Vietnam veteran and three-term senator, as presumptive nominee over the more outspoken Dean. In the wake of the Abu Ghraib prison scandal and escalating violence in Iraq, Bush's odds took a further dip.
"People are looking at the Abu Ghraib scandal and the war in Iraq, and Kerry's making a pretty good pitch that the public's been deceived," said Mike Knesevitch, spokesman for TradeSports. Another troubling sign for the Bush camp, Knesevitch noted, is that relatively good economic data hasn't translated into improving odds of victory.
"When good news fails to move the market, that tells you something. That's a very dangerous situation for Bush," he said.
Still, unlike most polls, TradeSports shows Bush with a modest lead over Kerry. The site also allows wagers on the odds of a Bush victory in each state. Odds on these wagers indicate that the incumbent president is likely to prevail in nearly all of the states he won back in 2000.
Also like 2000, TradeSports punters are setting close odds in swing stakes like Florida, Ohio and Pennsylvania, where Bush's chances of winning are set at 55 percent, 60 percent and 42 percent, respectively.
Overall, Bush's odds on online trading exchanges are slightly better than some recent polls indicate. A CBS poll conducted last week found that 49 percent of voters surveyed were more likely to cast a ballot for the Kerry ticket, compared with 44 percent for Bush.
Berg said part of the discrepancy between polls and online trading odds is because of the differing questions being posed. In polls, voters are asked whom they would vote for if the election were held today. On trading exchanges, voters consider who will be most likely to garner the most votes in November.
Odds for Bush may be better online, Servan-Schreiber postulated, because people are factoring in events that would help the president's public image over the next several months.
"Of course there was a big boost for the Bush contract when Saddam was caught, and we can expect a big boost for the Bush contract when (and if) Osama is caught as well," he said.
On NewsFutures, traders are also able to wager on when, if ever, Osama bin Laden will be captured. Servan-Schreiber has noticed a correlation between the two contracts – when odds of an imminent bin Laden capture go up, so do odds of Bush being re-elected.
That said, Servan-Schreiber stopped short of issuing his own forecast.
"Except for the fact that it's going to be very exciting, we have no idea," he said.
