Why don't betting markets believe in Donald Trump?

A bit of history: Between the Civil War and World War II, New York was the center of an active election betting market that sometimes surpassed trading on stocks and bonds. Indeed, a 2012 study found that before scientific polling, “betting market prices reflected the final outcome with remarkable accuracy,” competitive with late-campaign polls today. But today, in the modern age of ubiquitous polling, markets are believed to “simply follow the polls.”

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So why then are speculators strangely unmoved by Trump’s polling prowess? In the Iowa caucus polls, Trump is neck-and-neck with Ted Cruz, while betting markets make Cruz the clear favorite there over Trump, 52-31 percent, according to PredictWise. In New Hampshire, the first primary, Trump has a wide polling lead but bettors have him tied with Rubio. If state polls are close, bettors give the non-Trump candidate the edge. And if polls show a clear Trump lead, bettors have it a toss-up. What gives?

That skepticism is probably driven partially by history. Over the past century, presidential nominations have typically been won by experienced politicians or former generals who defeated Hitler. The last nominee who was neither was Republican utilities executive Wendell Willkie in 1940. Then again, Mitt Romney was the GOP nominee in 2012 and ran almost exclusively on his business record rather than on one term as Massachusetts governor. (Thanks, RomneyCare!) A businessman nominee, at least in the GOP, isn’t so far fetched.

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