But Big UK Bookmaker Says Odds For Presidency Still Favor Obama
By Dan Dorfman
New York, NY, January 17, 2012 -- Mitt-mania is sweeping political circles, what with Mitt Romney winning both Iowa and New Hampshire and now favored to take South Carolina and Florida, as well. Similarly, some Wall Streeters privately are betting big bucks among themselves that the former Massachusetts governor will win the nomination and the White House. That's also a bet, it appears, on continuing economic and market deterioration as the catalyst to explode chances of an Obama second term.
In contrast, one of the world's largest bookmakers, the United Kingdom's William Hill, which attracts some of the globe's most sophisticated political bettors and has a knack of picking U.S. presidential winners, still pegs Barack Obama as the favorite to win this year's presidential race.
The bookmaker's latest quoted odds show Obama as the favorite to win re-election. He's quoted at odds of 4 to 6 (meaning you put up $6 to win $4 for a total return of $10). Romney is second at 6 to 4.
However, Romney as the GOP nominee is becoming the runaway favorite at William Hill. The bookmaker on Monday, following Jon Huntsman's withdrawal, dramatically lowered the odds it is giving on Romney to win the GOP nomination to 1 to 20 ( meaning you put up $20 to win $1) compared to 1 to 9 recently. Gingrich is now the runner-up to win the nomination at 8 to 1, followed by Santorum at 20 to 1, Paul at 22 to 1 and Perry, 100 to 1. Romney also had has jumped to the top spot in betting on the South Carolina race with odds of 1 to 20, followed by Ron Paul at 16 to 1, Newt Gingrich and Rick Santorum both at 20 to 1, and Rick Perry at 100 to 1.
So why is Obama the odds on Presidential favorite -- at least for now -- at the London bookmaker given Romney's victories and America's economic woes?
It is all about money. "We have taken in far more money for Obama to win the election than for Romney," says Graham Sharpe, William Hill's media director. He also points out that Obama is guaranteed to be the Democrats' standard bearer, whereas while the odds are getting better on Romney, he is not yet assured of the Republican nomination.
Further, he notes, Romney will remain a divisive candidate should he win the nomination. Accordingly, he says, many voters who do not support him may abstain or vote for Obama.
Rounding out the odds at William Hill to win the presidency are Paul at 25 to 1, followed by Santorum 33 to 1, Gingrich, 40 to 1, and Perry, 150 to 1.
Meanwhile, brisk Wall Street betting on the presidential race is on the rise, according to Street contacts. Since political gambling in the U.S. is largely shrouded in secrecy, there's no way to accurately determine the extent of the cash bets.
However, some Street pros active on the political betting scene, reckon the amount of such cash bets this year--embracing both the likely GOP nominee and the presidential winner--will run roughly $25-$27 million, up an estimated $5-$6 million from the prior national election. The increase chiefly reflects a larger number of well publicized Republican candidates, a slew of debates and the media's non-stop election coverage.
One of the biggest cash bets I've heard about is by a top official of one of New York City's prominent buyout firms. Although a Democratic voter in the past, he has made an even money bet of $210,000 that Romney will win the nomination and the White House. In fact, he's looking to increase his even money bet to $250,000 with his Wall Street and corporate buddies, despite the fact that the London bookies say he should get favorable odds.
Of course these bets are pocket change to many big money guys on Wall Street who remain well insulated from what's going on in the rest of the economy.
Back in early 2008 this same Wall Street buyout heavyweight laid down $150,000 in an even money bet that Obama would win the Democratic nomination at a time the then Illinois senator was a huge underdog to Hillary Clinton.
"He's a sure thing, another JFK," the smitten Obama buyout pro told me at the time. "Even some Republicans will get to love him and he will more than likely be a two-term president." He was dead wrong, of course, on Obama's supposed love affair with the GOP, and now admits he probably was wrong about a second term.
Why the turnaround in thinking from 2008? He points to a sputtering economy, out-of-control debt, high unemployment, a still slumping housing sector, the European debt mess and worsening relations with Iran -- a concoction which he believes could produce much stock market anguish in 2012.
"The sad state of the economy means Obama will no longer be able to hide behind words of hope and change, so I'm putting my money on President-to be Romney," he said.
He and other Wall Street bettors I contacted, spoke only on an absolute guarantee of anonymity since such betting is illegal in the U.S. and the winnings are subject to a hefty tax bite from the Internal Revenue Service.
One of academia's most astute political minds, Larry Sabato, professor of politics at the University of Virginia, views the bet on Romney for the nomination as reasonable. He said that through process of elimination Republicans might well be coming around to Romney as their safest nominee, reasoning "He is perhaps the unlikeliest to implode or explode among the choices on the current ballot."
As for the presidency, Sabato views a Romney versus Obama race as a flip of the coin. He also cited a couple of major variables that could greatly influence the election, such as the state of the economy next fall and the possibility one or more third party candidates may announce a run for the presidency between February and June and tilt the playing field strongly to one side or the other.
On Wall Street, an intriguing election bet involving a full-paid African safari not to exceed $100,000 was made by two partners of a well known hedge fund. One bet on Romney; the other on Perry as the GOP nominee. No doubt the pro-Romney partner already is scanning catalogues for the proper posh safari attire.
Another interesting Wall Street bet is said to have been made by an attorney from a brokerage firm who wagered $10,000 Santorum will be the GOP's vice presidential nominee. Reportedly, he got 15 to 1 odds.
Finally, Wall Street biggies who certainly have the best handle on what Donald Trump is really all about aren't buying his claptrap of a possible presidential run. A hedge fund trader, a long-time contact is willing to bet 10 to 1 (specifically $200,000 against $20,000) that Donald Trump will not run for president. No surprise there's been no takers.
What do you think? E-mail me at Dandordan@aol.com
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.