2016 Presidential Election Predictions You Can Bet On

presidential election predictions

The best 2016 presidential election predictions won't be found in poll results or the endless stream of words that pour forth from the pundits.

No, the most accurate 2016 presidential election predictions are what's known as the "prediction markets."

presidential election predictionsIt almost sounds like something you might find on Wall Street or the Chicago trading pits - and in some ways, that's not far from the truth.

The prediction markets are websites where people can bet on the outcome of political races in the same way they bet on sporting events.

Time and again the prediction markets have done a better job of forecasting actual election results than do the polls - and they've done it in elections the world over.

"Prediction markets are literally the future in politics, media and finance," John Phillips, the CEO of Aristotle, a political consultancy business that provides services for PredictIt, told Politico last year. "They are fun, social, viral and shockingly accurate."

The amounts wagered can be staggering. About $230 million was bet on the 2012 presidential race alone.

Because betting on elections is illegal in the United States, this wagering is done on websites overseas, mostly in the UK. (Before you get any crazy ideas, these sites screen out U.S. customers.) The British love betting on U.S. elections, which they view as a kind of cheap entertainment.

"It is a competition. It's a tournament. It's also a television show. Having a financial interest in it makes it a bit more exciting. I backed Trump because I got on when it was still good value, and I think he is playing the game better than the rest," London taxi driver Phil Benjamin told USA Today.

But what makes the prediction markets more accurate than polls?

Why Prediction Markets Work

"People who bet in significant sums on an election outcome will usually have access to all the polling evidence. They take into account past experience of how good different pollsters are, what tends to happen to those who are undecided when they actually vote, and what might drive the agenda between the dates of the latest polling surveys and election day itself. All of this is captured in the markets but not in the polls," Leighton Vaughan Williams, director of the Political Forecasting Unit at Nottingham Business School, wrote in The Telegraph earlier this year.

In the 2012 presidential election, for example, pollsters like Gallup were forecasting a Mitt Romney victory, while an Ireland-based prediction market called Intrade called a Barack Obama win by projecting correctly how all but one state (Florida) would vote. Intrade did even better with the 2008 election, coming within one electoral vote of perfection.

Prediction markets are just as good at predicting voting behavior in referendums. In the 2014 Scottish referendum on independence, many polls had the vote very close, with some indicating a "yes" result. But the prediction markets had the odds at 1-4 for no and just 10-3 for yes. The no vote prevailed 55% to 45%.

Drawing on this "wisdom of crowds," here are the current 2016 presidential election predictions...

What These 2016 Presidential Election Predictions Are Saying Now

2016 presidential election predictionsUnfortunately, the once-popular Intrade was sued by the Commodities Futures Trading Commission (CFTC) in 2012 for taking bets from U.S. customers. The litigation forced the operation to shut down shortly afterward.

But there are many other predictive markets offering insights on the 2016 presidential election. And they have great news for the traditional candidates like former Florida Gov. Jeb Bush and former Secretary of State Hillary Clinton.

Just look at PredictWise, which aggregates two of the top predictive markets, Betfair and PredictIt. Here Jeb Bush currently has a 38% chance of winning the Republican nomination - a far cry from the 9% he earned in the recent CNN/ORC poll.

Florida Sen. Marco Rubio is second on PredictWise with a 20% chance (he's at 11% in the poll).

Meanwhile, front-runner Donald Trump is third with just a 13% chance, even though he led the CNN/ORC poll with 24% and has drawn support of more than 30% in some polls.

Former Hewlett-Packard Co. (NYSE HPQ) CEO Carly Fiorina is given an 11% chance (she zoomed to 15% in the poll). Retired neurosurgeon Ben Carson gets just a 5% chance on PredictWise, despite his strong 15% showing in the CNN/ORC poll.

The Prediction Markets Agree: It's Bush vs. Clinton

On Oddschecker.com, a site that lists the odds of more than 20 prediction markets, Bush's odds fall in the 50% to 60% range, while Trump's fall in the 30% to 40% range. Rubio's chances range in the low 20s. Carson's odds fall in the low teens, and Fiorina's in the high single digits.

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On the Democratic side, PredictIt gives Hillary Clinton a 69% of taking her party's nomination. Vice President Joe Biden is second at 18% - despite the fact he hasn't announced his candidacy. And upstart Vermont Sen. Bernie Sanders is given just a 12% chance.

The prediction markets don't seem concerned that Clinton's lead in the polls has shrunk from 63% in July to the low 40s, or that Sanders' poll numbers have risen to the low 20s.

Pivit, a prediction market site that uses news, historical data, and reader opinions instead of betting, closely matches what the betting sites are saying.

On Pivit, Jeb Bush has a 25% chance of getting the GOP nomination, with Rubio at 22%, Fiorina at 18%, Trump in fourth with 13%, and Carson at 6%.

Pivit gives Clinton a 56% chance of getting the Democratic nomination, with 22% for Biden, and 21% for Sanders.

All of these 2016 presidential election predictions point to a Bush-Clinton fight for the White House.

So who wins? Do the prediction markets have an answer?

Some do. Pivit is split 50-50 right now. But PredictWise gives the Democrats a 59% chance of winning the presidency (Clinton herself has a 41% chance, Bush just a 16% chance).

The sites on Oddschecker are much more optimistic of a Clinton victory. Her odds of being the next U.S. president fall in the 70% to 80% range. What email scandal?

Bush's odds are mostly in the 20s. Trump's range from the single digits to the mid-teens - not much higher than those of Sanders.

We still have more than a year to go, but for now the best 2016 presidential election predictions put Hillary Clinton in the White House.

The Bottom Line: If you want the most accurate 2016 presidential election predictions, ignore the polls and look at the prediction markets. Using a full range of information, people who bet on elections generate the best results. And right now, the prediction markets say we'll see Jeb Bush go up against Hillary Clinton in 2016, with Clinton taking the White House.

Follow me on Twitter @DavidGZeiler.

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