Are you a betting man or woman? Professional bettors, Betfair.com, give Barack Obama a 91% likelihood of winning tomorrow’s Presidential election.

A big-time bettor was asked: "Do you think handicappers can forecast the outcome of the presidential election better than polls?"

He didn’t hesitate. "Polls can be inaccurate. People may say what is politically correct, the questions may be leading, the pollsters may be biased. A pollster can still bill for an inaccurate poll. Bookmakers must make an accurate line or they lose — period."

 "Gamblers have more experience with cheaters," he said. "They take voter fraud into their metrics. Polls don’t. Nor do polls take into account how each state’s secretary of state factors in, or systems within a state designed to eliminate voters; Jimmy the Greek called these ‘the intangibles.’" 

Koleman Strumpf, a University of Kansas economics professor who tracks betting trends and University of Arizona economist Paul Rhode authored a study — "Historical Presidential Betting Markets," published in Journal of Economic Perspectives — that demonstrates that the betting market’s forecasting superiority is nothing new.  

They begin with America’s long history of wagering on political outcomes, which boomed in the 1880s when betting moved from pool rooms to the Curb Exchange, the predecessor to the American Stock Exchange. Betting on political outcomes often drew huge crowds to Wall Street and exceeded trading in stocks and bonds.  

"In presidential races such as 1896, 1900, 1904, 1916, and 1924, the New York Times, Sun, and World provided nearly daily [betting] quotes from early October until Election Day," write Rhode and Strumpf.  

The papers’ sources were betting firms, which had men present at speeches made by the candidates in order to make "unbiased reports of the psychological reactions of the audiences."  

In the fifteen elections between 1884 and 1940, the betting firms were wrong just once, in 1916, when Wilson upset Hughes. And the gamblers might have had a perfect record had the Curb Market stayed open long enough to take into account late-breaking news from the West.  

The advent of polls marked the end of an era. "Prior to Gallup’s introduction in 1936, newspapers had little else to report about the election horserace other than the betting markets," Strumpf said. "When scientific polls came along, newspapers had something to report other than markets they were oftentimes uncomfortable with."  

Responding to such discomfort, state laws increasingly limited organized election betting. Betting persisted, but in the shadows. Accordingly little data exists from 1940 through 1984, though it’s enough that Strumpf concludes gamblers were more accurate than the pollsters in that period too. 

The advent of internet wagering offers a clearer picture: "Since 1988, the betting markets have definitely been more accurate," Strumpf said.  

It’s still illegal for United States citizens to wager on the presidential election; Betfair and Intrade try to bar American bettors. Several newer off-shore sites are more lenient, however.  

Currently, Betfair lists Barack Obama as an overwhelming 1-7 favorite (paying $8 for a $7 winning bet). A John McCain win would pay $6.80 for every dollar bet.  

"On Election Night I’ll look at the movement on the betting sites to see what’s going on," Strumpf says. "I watch CNN too, out of the corner of an eye, but it’s not necessary."

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