Betfair Suspending US election Betting Market Encourages Moral Hazard
After Donald Trump announced on twitter that he and the first lady, Melania Trump, had tested positive for coronavirus, the implied probability that he would win the 2020 presidential election
was 36% - at which point the market was rather bizarrely suspended in order to protect customers with unmatched bets in the market ............................. Some argue, including one of the regular authors on this website, that Betfairís response to the news that Donald Trump contacted coronavirus has served to usher in an new era of faux trader confidence and the moral hazard that Betfair will always backstop traders who have been caught with their pants around their ankles. Thus, forever distorting betting market risk and real price discovery and contributing to the belief that these exists a group of liquidity providers who are somehow afforded a special status - was it in fact Betfair's own traders that were being protected? Funny that none of the traders that had their trades cancelled by Betfair are squealing too loudly after the fact.
@FiveThirtyEight's latest forecast says that there is a 10% chance Trump wins and that even a 2016-style polling error wouldnít be enough for him to do so.."As of right now, Bidenís lead is large enough that Trumpís chances of winning are 10 percent, considerably lower than the 35 percent chance he had at this point in 2016."
The Betfair Betting Exchange Political Betting Market still has the implied probability of Trump winning at 30% - you decide!
To cite this article: Niall O'ConnorBetfair Suspending US election Betting Market Encourages Moral Hazard. (Published on Bettingmarket.com 28/09/2020 . Cognitive Flexibity = Greater Plasticity. All Rights Reserved.)
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