The wisdom of betting markets?

Updated (9/26): I am interrupting my series of posts on illicit promises to place a bet on whether President Donald J. Trump will be impeached before 12/31/19. According to this report by Ben Winck, for example, the odds of President Trump’s impeachment have soared on one popular betting website (predictit.org), rising as high as $0.62 after House Speaker Nancy Pelosi made her symbolic announcement yesterday. Since each bet is made against a single dollar, bettors collectively believe there is a 62% likelihood that Trump will be impeached in the House.

Is this a good bet? A simple majority in the House is sufficient to impeach President Trump, although a two-thirds super-majority in the Senate is required to actually remove him from office. (See chart below.) According to this headcount in Politico (updated 9/26), 208 221 members of the House now support impeachment or an impeachment inquiry. But even if Trump is impeached by the House before the end of this year, will Senator Mitch McConnell “pull a Merrick Garland” and refuse to convene a trial? After all, the next presidential election is just 13 months away …

“Checks & Balances”

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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