The last update from the betting markets before the first votes are cast on Monday shows that both Donald Trump and Hillary Clinton are the odds on favorites to win their respective caucuses (as well as their parties’ nominations.) For video clip, click here.
After having lagged well behind Ted Cruz for all of 2015 and even into January of 2016, Donald Trump began to surge — coincidentally or not — almost exactly on the day that Sarah Palin endorsed him. While his likelihood of winning has come down a little in the last several days, he is still given a 55% chance of winning, compared to 38% for Cruz. Note that this means that Trump’s probability of winning is still only a bit over 50-50 so this is by no means a slam dunk for him.
The picture is less murky on the Democratic side — unlike the opinion polls, which have at times shown Bernie Sanders to be even or ahead of Hillary Clinton, the betting markets have never wavered in their conviction that she would win in Iowa. While Sanders gained sharply on her in early January, he has never been able to get above a 40% chance of winning and currently sits at 32%, compared to Clinton’s 68%.
Given the betting market’s view of Iowa (and its even stronger view of Trump’s chances in New Hampshire and South Carolina), it’s not surprising that he has finally overtaken Rubio as the market’s favorite to win the nomination. (Note that Rubio only became the favorite last fall, when Jeb Bush faltered.) At present, Trump has a 49% chance of becoming the nominee, importantly, still only even odds. Note also that Cruz’s brief surge at the turn of the year has reversed and he is down to only an 11% chance, consistent with the notion that if he loses Iowa, he will have a tough time recovering.