Who Will Trump Pick for Veep? Polymarket Gives Tim Scott Best Odds: Prediction Markets

Plus: Free money? "Democrat wins New York" contract trades at 90 cents on the dollar.

AccessTimeIconApr 1, 2024 at 1:16 p.m. UTC
Updated Apr 17, 2024 at 5:08 p.m. UTC

Sometime in the next few weeks, the Republicans and Democrats will announce their respective presidential candidates' running mates as the U.S. gears up for the November election.

On crypto-based prediction platform Polymarket, there's currently $13.7 million pledged toward figuring out who the Republican vice presidential candidate might be, but the market is far from forming a consensus.

South Carolina Senator Tim Scott is leading the pack with 23%. But contracts for "other man" and "other woman" have a collective 25%. Other high-profile Republicans aren't even cracking the double digits. Marco Rubio is at 4%, while Vivek Ramaswamy – who holds more name recognition with the Discord crowd than the general electorate – is at 3% but with $1.1 million bet on him specifically.

Robert F. Kennedy, Jr., best known for his staunch anti-vax views, is at 2%. While the scion of a Democratic dynasty hasn't quite defected to the GOP, the Twitterati had floated the idea of a unity ticket with Trump and Kennedy, though, again, that idea is farfetched and the market is reflecting its unlikelihood.

Free money?

Under a regulatory settlement, Polymarket prohibits users that reside in the United States, which creates the possibility that the platform's bettors might not be the best informed out there on the topic of American politics.

An uninformed market might be creating price discrepancies where there's a lag between a realistic chance of something happening and the market price – in other words, opportunities for free money.

Prediction market trading house CSP Trading may have found such an instance, highlighting in a post on X (formerly Twitter) that Polymarket is giving only a 90% chance that a Democrat will take New York. If 90% sounds high, consider that the last Republican to win the state was Ronald Reagan in 1984.

Polls show that Biden will take the state by 10 points, and while that margin is narrowing, it's still a healthy lead. There may be a narrative that urban New York's ailment of crime and chaos is caused by ultra-progressive politics, with a ruling elite more concerned about pronouns in email signatures than the plight of the working stiff. But the answer to this has been a slate of moderate Democrats at all levels of government, and voters have been receptive to them. So the idea that an anti-Democrat protest vote would form seems like a longshot, perhaps wishful thinking among some of the terminally online.

Contracts for other deep blue states are presenting similar numbers. The market thinks that there's a 92% chance California goes Democrat; a 10% chance a Republican will take Washington state; and a 93% chance a Republican will take West Virginia.

Historically these are all states that have some of the longest single-party voting streaks.

California, for instance, has consistently voted Democrat since 1992 when it decided to go for Bill Clinton over a second term of George H.W. Bush and has stayed that way since. Certainly, California had its Republican moments from 1952 to 1988, but current polls have it as a definite landslide for President Joe Biden and the Democrats.

But why look a gift horse in the mouth? Betting Yes on Polymarket's "Dems win New York" contract stands to pay out around a 10% return – far more than one would get from a high-interest savings account.

Hedging the weather

Betting on the weather might seem as degenerate as betting on the chance of a specific crypto project launching an airdrop this year. Compulsive gamblers looking for something new to bet on, the critics might say.

Except it's not. Weather derivatives are one of the oldest, most primitive forms of prediction markets as they are a way to hedge against extreme conditions causing crop failure. With climate change causing 2023 to be the warmest year on record, with freak, violent storms, and unexpected cold snaps, there's a new level of unpredictability – and urgency – involved in this.

Kalshi, the only regulated prediction market platform in the U.S., has contracts for the day's weather in a number of major American cities. When we think about weather derivatives and hedging, we often associate that with quants hired by major food conglomerates trying to make hedges in the hundreds of millions of dollars.

Kalshi's dollar-based contracts can do this at a smaller level, enough for a mom-and-pop shop selling something seasonal. An ice cream shop might want to hedge against a day of rain, or a shop selling fall and winter apparel could prepare for a late summer and unseasonably warm spring.

While you can't control the weather, you can still do something about it.

And, lastly…

Punters on Polymarket are betting on Donald Trump dropping the crypto B-bomb in an upcoming rally.

Some crypto people are apparently planning to hold a picture of the meme coin BODEN, a Joe Biden riff which commands a $240 million market capitalization as of Monday morning, at a Trump rally.

The idea is to get Trump to spot a large poster of Boden and call it hilarious - which punters think could pump their BODEN bags.

BODEN is inspired by Spoderman, a poorly drawn version of Spider-Man, which in turn is an homage to Dolan, a bastardized version of Donald Duck with an attitude problem, should you be wondering.

Edited by Marc Hochstein.


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Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.