US Midterms 2026 - A Well Deserved Victory Lap!
Last night was election night and it's always an intense one - there are always political bets on the bankroll throughout the year but US election nights in November is when the bulk of the bankroll gets deployed. The stakes are high, but so are the rewards. This is not like sports betting, where there is a small number of players and each player's decisions makes a real difference and there is an element of randomness to the bounce of the ball. In political betting, the odds are less a quantification of future variance but rather uncertainty of current information. The importance of thorough research is paramount.
This was my second US November election night in Sportspicks. I joined some time after the 2024 presidential election but I was betting that myself anyway. Robert Barnes' analysis with Richard Baris was a large part of the analysis that informed my decision making and so even though I was not there, I did share in the spoils, so to speak. Last year we have the mini midterms, where there were several states with their own elections for positions like governor. It was unfortunate that our big play on Jason Miyares to win the Virginia Attorney General election didn't cash and it was a very painful miss due to the amount that was placed on it. Nonetheless, what makes betting sharpness is not being right on every single call, it is how you respond to being wrong and a crucial aspect of sharp betting is reviewing bets, incorporating new information, deepening your understanding and course correcting when necessary and before it is too late.
Last year's Virginia AG race was still something we learned a great deal from: when things are going really bad, people don't care if you wished death on your political opponent's children or you kicked a dog on camera, if they're pissed off enough they'll vote for you as a repudiation of the party they're running against. We were already going in the direction of this year's midterms being a bloodbath for the GOP but last year's election gave us a very concrete signal, a canary in the coalmine that last night could get very, very ugly. The research that Barnes did was very clear: foreign wars, economic woes and scandals that your voterbase care about when they align lead to disastrous results for the party in power. The fundamentals were there and combined with the work Baris was doing on polling painted a gruesome picture for all to see.
In previous election cycles the split was more clean. Most people in this group are right leaning (or would be considered such by anyone on the left) and so although betting on Trump and the Republican Party in previous cycles may have required a certain leap of faith against the mainstream media and political establishment, it wasn't fundamentally a controversial take. This election cycle was very different. I was astounded (and in retrospect I probably shouldn't have been) at the sheer amount of vitriol aimed towards Barnes and Baris online. It was shooting the messenger taken to an absurd degree and rather than debate the underlying drivers of voting behaviour, the responses mostly attacked them as panicans that have ulterior motives and are disloyal to Trump. I don't remember anyone on the left displaying such viciousness towards them in the last cycle.
As it turns out, the blue tsunami arrived. Pretty much everything Barnes and Baris warned about came to pass. What is remarkable is how the mood on the online right changed over the course of one day. Going into it they were defiant, convinced a red wave was coming, that Trump's policies were winning and that the economy was doing better than ever and that anyone not doing well was a loser who just needed to stop whining and pull themselves up by their bootstraps. Early in the day reports circulated on social media of unprecedented lines to vote for midterms, "presidential margins", we were told. If only they remembered that the exact same stuff was said for the midterms four years ago and the Democrats still won the senate and barely lost the house. Some were even feeling very bullish when Republicans won the governorship in Guam. It was all downhill from there and as the night went on, the sentiment went from being very bullish to one of anger, pointing fingers and one of the system is broken, may as well let it burn - ironically the exact same sentiment that had caused the Trump 2024 coalition to fracture and open the door for this blue wave in the first place.
Finding edges in betting is not merely about accurately gauging the probabilities of certain events. It is also about gauging what another person assesses to be their projected probability. In many cases the other person thinks something is a dead cert and so they will confidently take the other side of the wager that you offer. In US elections (and elections in general for that matter) it was never that one side is destined to win and the other is destined to lose. It's that there is a considerable amount of uncertainty to sift through an quantify, and doing that accurately is where edge lies. In past election cycles, fading the Democrat establishment has been very profitable because they had such hubris, such blindness to what was happening on the ground, such a lack of ability to think outside their world view that when they offered high conviction that there side was going to win, we were happy to take it. We all know how that worked out in 2024. Now we saw the same thing but from the other side.
This time is was the Republican establishment, the war horny neocons, the cheerleaders for the bombs, the stick it to everyone who isn't us and the Trump diehard loyalists whose turn it was to be on the wrong side of the tracks. The online right got a taste of what it has been like to be the online left for over a decade and I imagine that is an extremely bitter taste indeed. We tried to warn them, but it they don't listen, we're happy to take the other side. If one side is willing to be foolhardy and reckless yet be too blind to see it, we may as well make some money off it. Thus the circle of life continues and we remain unmarried to any position or ideology, we simply strive for the truth and the best way to validate that is to back it up with money that we can afford to lose but in this case we were well placed to get a return on.
It is easy for me to say this all with the benefit of hindsight. The hard part is having conviction when things are uncertain, when so many voices tell you you're not only wrong, but you're a bad person for believing what you do (sound familiar?), to not doubt yourself and to hold steady with what your edge is telling you. It takes courage to put your money where your mouth is when you face hostility and ridicule if the ball bounces against you. So to all who took the official picks, well done. Barnes and Baris have done one hell of a job this election cycle. It was an extraordinarily profitable night last night and I hope you all toasted it with a whiskey or a cigar or whatever your vice(s) of choice is(are). The work for the next big plays starts now, and the continuous work of finding day to day edges in sports continues. The big wheel keeps on turning, and so on and so forth. Profits are measured over months and years, not days and weeks. Last night was a payoff for work that went all the way back into last year and before.
I don't want to be indulgent here so I will keep this brief. My biggest play of the midterms was Democrats to win the Ohio senate and governship, which I posted back in March of this year. I looked at Vivek Ramaswamy running for Ohio governor and thought this makes no sense whatsoever. His stock was high for quite a while but then he released that H1B visa rant on X in which he said American culture venerates mediocrity and that American kids need less sleepovers and more tutoring, He shredded all the goodwill he had banked up overnight and he left DOGE. What someone in his position should have done is stay quiet for a while and find an opening into political office, an office that doesn't seem as if you're running for self interested reasons of clout. Instead, he went straight for the Ohio governorship in a state that is not exactly known for being receptive to importing foreign labour or being blamed for working class struggles.
The big point of interest here is Vivek was backed by big money and the entire GOP establishment. Amy Acton wasn't really backed at all until the Democrats sensed she could win that race. The warning signs were already there: Vivek, despite being born in Cincinnati, was about as popular in Ohio as Dr Oz was in Pennsylvania during the 2022 midterms. Neither of them were hated, they still got mid 40s percentage of the vote but both were candidates that in retrospect anyone can look at them and ask "What the hell were they thinking? How did anyone think they would win?" Both were backed by the establishment and looked like they were the obvious choice based on trends but in reality were ill suited to the race they were running. It doesn't help that Vivek has all the political instincts as a slug and when he bankrolled that ad where Amy Acton's mother attacked her with all the deeply nasty stuff that entailed, I wasn't surprised. He had already badly failed to read the room in that H1B visa rant and he failed to read the room again by running for governor. I would have been more surprised if he didn't torpedo his own campaign. That's exactly why I was looking at him as a fade: he was a candidate who looked good on the surface but had very serious underlying problems that would not hold up to scrutiny in an unfavourable electoral environment for Republicans.
Personally I do not have a dog in this fight as I am neither American nor do I live in the USA. I find it sad that Trump was squandered his legacy in such spectacular fashion. One of the things that betting and prediction markets teaches you is that your personal beliefs and reality are not the same thing. If you can separate them, great, but if you conflate them into being the same thing, you can easily end up washing up against the jagged rocks of the markets. I think we've all moved long beyond the point of becoming emotionally invested in one electoral outcome over another and are instead asking are these outcomes fairly priced. When we find mispricings and accurately determine in which direction they are mispriced, that is how we are able to obtain a degree of outcome independence from big events. In an uncertain world, we can hedge ourselves against the future, which is one of our most ancient, primal instincts yet which also requires a keen discipline and exercise of intellect to master.
