Trump Impeachment Update

1027
August 16th, 2017
Back Trump Impeachment Update

In a sentence: It takes a lot to fire the President of the United States.

Longer Version:

There has been a whirlwind of activity in the last month that has led to the Odds of Impeachment (implied by PredictIt and proper sportsbooks alike) to change somewhat dramatically more in favor of impeachment. We will get into some of the specific odds later, but first, let’s highlight some of the various ongoings that may have impacted (subjectively) the odds in the past month.

Needless to say, anyone at any other job would have likely been fired by now.

Health Care Bill Failure:

There were a number of efforts to repeal & replace the Affordable Care Act (known colloquially as ObamaCare) and months of debate and efforts to do so took place in the Senate as well as the House of Representatives.

Whether you want to call it a credit or criticism, the House of Representatives did manage to pass by a vote of 217-213 (closer than it sounds as 216 votes were still technically required) a bill that would have repealed and replaced the ACA. However, that bill then moved on to the Senate, in which it failed.

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The Senate would require sixty votes to sign a bill into law under normal Senate procedures, and the House healthcare bill would not have comes anywhere close to sixty votes. However, due to a procedural mechanism having to do with budgetary spending, the Republican-led Senate and Majority Leader Mitch McConnell were able to circumvent the normal rules and effectuate a result of only fifty votes needed. It looked as though there would be some opportunity for passage given that the Senate is comprised of fifty-two Republicans, and they also have the presumptive tie-breaking vote from Republican Vice-President Mike Pence.

The Senate, however, was not able to pass the House of Representatives’ bill even with the reduced threshold necessary for passage. The most recent House effort, titled, ‘The Better Care Reconciliation Act,’ faced early opposition from two Republican Senators which necessitated that the Republicans not lose any additional Senate support.

Senator Rand Paul from Kentucky was opposed to the bill largely due to the fact that he did not find it conservative enough, mainly because some aspects of ObamaCare remained in place. Maine’s Susan Collins also opposed the bill due to presumptive cuts in Medicaid that would come as a result. As many of you probably know, Maine is a generally left-leaning state, so to support the bill might have also played Hell on Collins’ future reelection potential.

In the middle of July, Mike Lee of Utah and Jerry Moran of Kansas similarly came together and announced that neither of them would be supporting the House bill. Given that there was absolutely no possibility of any Democrats voting in favor of the House bill, the bill effectively died. At that time, John McCain stated that the time had come for the Senate to return to regular order and Majority Leader Mitch McConnell seemed to concede defeat.

President Trump unleashed some scathing remarks on Twitter against all of the Democratic Senators as well as the Republican Senators who opposed the House bill, who he essentially saw as defectors. Essentially, Trump stated that there was no excuse not to get a repeal & replace done because the Republicans control the House of Representatives, the Senate and the White House.

Despite McConnell’s seeming resignation, he would come back just a few short days later with a refusal to return the Senate to regular session instead of making an effort for the Senate to come up with its own bill to send to the House for approval. The details of the two Senate efforts at a full repeal are fairly convoluted, and the bill was not voted upon (it would have failed) anyway, so we will not address that here.

Just over a week after the House bill failed in the Senate, the Senate came together to pass a bill that would repeal ObamaCare but would not immediately put a replacement in place. In addition to being totally irresponsible, this bill was not even remotely viable as it failed by a vote of 55-45 with seven Republican Senators voting against it.

The final effort made to repeal ObamaCare was known as the, ‘Skinny Repeal,’ bill. The goal was to effectively repeal some parts of the bill while leaving others intact. Ironically, the real goal behind this bill was to get it over to the House of Representatives for modification so that it could then go to a joint committee for change to be made in an effort for both sides to eventually pass it.

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Did you follow all that?

By itself, the bill would probably be even more irresponsible than the original repeal without a replacement bill because it would cause ObamaCare to continue to be law, but ObamaCare would no longer be fiscally viable. In other words, if the House of Representatives were to pass the, ‘Skinny Repeal,’ as written, ObamaCare would inevitably fail while still remaining law. The Skinny Repeal can be summed up in these bullet points:

  • Get rid of the mandate that individuals either have insurance or pay a fine.
  • Get rid of the mandate that employers in the United States with fifty or more employees must provide access to insurance or pay a fine.
  • Allow states to enforce, in a more limited way, the aspects of ObamaCare that require insurance companies to provide ten essential services. In essence, the insurance companies would not necessarily have to provide all ten of those services, depending on the state in which the insurer is located.
  • Defund Planned Parenthood and similar providers.

There are a few other points that would have had less dramatic and immediate effects on the viability of ObamaCare, but the points highlighted above are the most effectual.

The Congressional Budget Office determined that the ‘Skinny Repeal,’ bill would have the immediate effect of fifteen million fewer Americans being uninsured as of next year, but at the same time, premiums would also increase by 20% as of next year.

Whether or not one believes in ObamaCare from a political standpoint, there is no question that there are a bunch of mathematical reasons why this, ‘Skinny Repeal,’ would cause these things to happen. As anyone can tell, absolutely nobody would benefit from the passage of, ‘Skinny Repeal,’ (aside from employers with fifty, or more, employees who wish not to offer insurance) and it would cost those who are insured more money.

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The first reason is the fact that employers of fifty or more individuals MUST provide insurance under current law. That is important because it effectively prevents employers, especially at low-paying jobs, from not offering any insurance to their employees. Generally, insurance plans that are offered as a group plan through a company are going to be cheaper than individuals having to get insurance for themselves.

Employers also technically do not have to offer insurance, even if they employ fifty or more people, but they pay a fine if they do not.

The fines that would be paid by employers who opt not to offer insurance contribute funding to the Affordable Care Act, in general.

The individual mandate is also very similar in concept. Essentially, the individual mandate forces an individual who is not covered through his/her employer, or some other means (such as Medicaid) to purchase insurance or pay a fine every year. Once again, for those individuals who choose not to be covered by insurance, the fine that is paid also goes directly to help fund the Affordable Care Act. It also ensures that more people will opt to be insured, (since you have to pay the fine anyway if you are not) which means that medical care providers are more likely to be compensated if a person goes in for medical care.

The, ‘Skinny Repeal,’ Bill would have given the states more latitude in determining what, if any, services insurers must provide. The Affordable Care Act calls for insurers to provide ten services deemed, ‘Essential,’ or face significant penalties. This is necessary because otherwise unscrupulous insurance companies could offer packages that essentially don’t cover anything at all and people would purchase them just to avoid paying the fines.

Finally, it would have defunded Planned Parenthood for a few years instead diverting the money to various community care centers.

The first three bullet points are the most important because from those comes the money that is necessary to give the Affordable Care Act the ability to work. The idea is that if both the very healthy and the very ill all consistently have insurance then the total costs of the nation’s healthcare will be more balanced from one individual to another. Furthermore, individuals with pre-existing conditions will also be able to receive affordable coverage because their healthcare costs are partially assuaged by the profits made off of the healthy.

If this sounds like socialized medicine compared to the old system, it’s not exactly, but it’s a solid step in that direction.

Anyway, the passage of the ‘Skinny Repeal,’ would essentially cause it to be such that the Affordable Care Act could not sustain itself unless the insurance companies were to increase the premiums on whatever remaining customers they have left.

However you may feel about the Affordable Care Act, it doesn’t change the fact that the, ‘Skinny Repeal,’ was not a viable option by itself. This was proven by the fact that several Republican Senators wanted assurances from Speaker of the House Paul Ryan that the House would not pass, ‘Skinny Repeal,’ as molded if the Senate were to do so. In effect, the Republican Senators who did vote for it were effectively only voting in favor of debate over repeal and replacement to continue. The, ‘Skinny Repeal,’ in and of itself, was recognized by one and all to be a complete disaster if it passed.

Of course, the House of Representatives may have still passed it had they not been able to come up with an agreement to something different with the Senate. Fortunately, the bill failed in the Senate, so we’ll never have to find out. Again, the fact that a bill almost passed just the Senate that would have benefitted nobody at all is alarming.

Fortunately, Lisa Murkowski of Alaska, Susan Collins of Maine and John McCain, “The Maverick,” of Arizona all voted against the ‘Skinny Repeal,’ bill and caused it to fail 49-51. John McCain recognized that the bill, had it passed the House would have been an abject disaster that would have harmed the public as a whole. With respect to Murkowski (whose state of Alaska Donald Trump directly threatened) and Collins, they were against many aspects of the bill including the defunding of Planned Parenthood.

Naturally, Senate Majority Leader Mitch McConnell lamented the failure of the bill which also signals the failure, for the time being, to repeal and replace ObamaCare. Knowing that any efforts to repeal and replace would be dead for the time being, McConnell essentially admitted that it was time for the Senate to move onto other matters.

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Russia Sanctions:

The first matter that the Senate moved onto was a bill that was overwhelmingly supported by both houses of Congress to prevent President Donald Trump from having the ability to weaken sanctions that were leveled against Russia for their perceived interference in last year’s Presidential election.

The bill was passed in the House of Representatives by a vote of 419-3 and the Senate by a vote of 98-2, both of which are well beyond veto-proof majorities.

For his part, Trump took to attacking the Senate for their inability to pass a repeal and replace bill as well as not so subtly lamenting the fact that both houses of Congress overwhelmingly voted to prevent Trump from weakening the sanctions against Russia.

You’re Fired:

Trump’s unhappiness with the performance of the Senate was made immediately apparent in the White House which faced some serious staffing changes immediately after everything that happened in the Senate. The first thing that happened was that President Trump appointed Anthony Scaramucci as the new Communications Director which led to the immediate resignation of White House Press Secretary Sean Spicer, who was against the appointment of Scaramucci.

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Scaramucci decided to come in with all the bombast and bluster of the man who appointed him, President Donald Trump. In an NSFW (Not-Safe-For-Work) phone call with Ryan Lizza of the New York Post, Scaramucci threatened to fire his entire staff if Lizza did not reveal to him the source of information pertaining to the attendees of a White House dinner. It is speculated that Scaramucci’s main problem with the reveal was the dissemination that Kimberly Guilfoyle was present at the dinner, which some people believe that Scaramucci was having an affair with.

Also during the phone call, Scaramucci referred to then White House Chief of Staff, and former Republican National Committee Chairman, Reince Priebus a, “F---ing paranoid schizophrenic,” who was concerned that Scaramucci would come after him and his job. He accused Priebus of ****-blocking his appointment as Communications Director and seemed to indicate his belief that he would have been appointed to same prior to that without Trump’s interference.

He also, for whatever reason, accused White House Chief Strategist Steve Bannon of attempting to build a brand based, “Off of the strength of the President,” as well as accusing him of autofellatio. He stated, “I’m not Steve Bannon, I’m not trying to suck my own c***.”

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While many of us laymen may talk like that to our friends, again, this is the sort of behavior that would result in just about anyone getting terminated by their employer in a normal environment. Furthermore, this is not how one expects someone whose title is, ‘Communications Director,’ to, you know, communicate.

In his defense, Scaramucci does point out that he was not aware the conversation was being recorded, and furthermore, while he did not specifically ask to be off the record stated that the ‘Spirit,’ of the call was off the record. Either way, one might expect the Communications Director (again, read the job title) to know he has to say off the record.

Furthermore, Scaramucci accused just about every one of illegally leaking his financial information and saying he would get the FBI to investigate the leak. Amusingly enough, the financial disclosure forms that had to be filled out for Scaramucci to take his position that was, ‘Leaked,’ are both a required disclosure and public information.

For his part, Reince Priebus resigned shortly after this news came out with as close as he could muster to decorum. Having been thoroughly embarrassed, he swore to continue to support the President and stated that he would not get, ‘Down in the mud,’ with Scaramucci as relates to some of his more personally derogatory comments.

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After spending the better part of a week making himself look like an asshole, Scaramucci ultimately resigned from his post as Communications Director (the shortest reign on record) shortly after retired General John Kelly was named White House Chief of Staff. General Kelly was concerned that Scaramucci had effectively tarnished the credibility that he doesn’t really seem to have ever had to begin with. In any event, Scaramucci certainly did nothing to make the President look good.

There were a few other faux pas’ that took place during this time, but they almost seem like footnotes at this point. For one was Trump’s politically-charged, and otherwise largely nonsensical, speech at the annual convention of Boy Scouts which took place in West Virginia. Feel free to Google that and read all about it. I’m not going to rehash it here because with any other President it would be a huge ordeal, but with this one, it’s hardly worthy of mention.

Additionally, Trump also gave a speech to Suffolk County (NY) police officers during which he appeared not only to condone but also encourage, violence towards perceived offenders who had not yet been found guilty. Whether or not that was meant to be taken literally is up for debate, it’s really hard to tell with this Administration.

Implied Odds:

With all of this, the implied Odds for a Trump Impeachment have soared on PredictIt.com, so we’re going to take a look at that first.

While the recent news cycles have seemed unfavorable, in truth, the real probability of any removal from office in the short-term has not changed very much. The fact of the matter remains that President Trump is popular enough with many registered Republicans that an effort to impeach him, which would require considerable Republican support, would not be a politically advisable move for those Congressmen/Congresswomen hoping to get re-elected. Furthermore, not only could they face Democratic challengers in the General (Midterm) Election next year, but the real threat would come from potential primary challengers.

The good news for those of you willing to see how unreasonable it is to assert that Trump will be impeached and removed from office in the near future is that other people react strongly to such news cycles and seem to believe that they spell a very quick end for this Administration.

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We have already talked about how long Mueller’s investigation will take to complete as well as how long the actual process of Impeachment and removal from office would take before, so we’ll skip all that. Here is the link to the article in which all of that was discussed.

Let’s jump over to the White House page on PredictIt and take a look at some of our propositions.

The first one we want to look at is whether or not Trump will be President by year-end 2017, but at the same time, you want to look at the related question of will Pence be Vice-President at year-end 2017. The reason why is that for Pence not to be the Vice-President means that Trump is no longer the President, so you want to take whichever of the two options is the cheaper, ‘Yes,’ if that’s the side you want. If you want to take the, ‘No,’ then you want whichever, ‘No,’ is cheaper.

Again, the Articles of Impeachment are not going to go through the House and then the Senate vote in favor of removal from office by year’s end, even if the Mueller investigation ends in the near future. Besides that, the Mueller findings would have to be sufficient enough even to warrant Impeachment and removal from office. By that, I mean, politically sufficient.

The fact of the matter is that Trump still has a fairly die-hard following amongst his staunchest supporters, so voting in favor of Impeachment and/or removal from office is tantamount to political suicide. That is especially true if the most rabid of Trump’s supporters do not eventually turn on him and decide that whatever actions he is found to have committed (if any) with respect to Russia (or otherwise) are enough to justify his removal.

A simple way to see how popular President Trump is would be to go to fivethirtyeight.com and see their tracker which takes into account several polls and adjusts them according to how recent they are and the perceived partisan lean of the pollster in question.

As you can see, Trump is currently polling in the mid-high thirties with respect to approval rating, about 37.6% as of the time of this writing while about 56.5% disapprove and roughly 5.9% are undecided.

Those numbers are certainly awful, but what they do indicate is a support base that, while slowly eroding, remains reasonably strong. Simply put, a majority of self-identified Republicans (the polls that this is based on consider everyone) still approve of the job Donald Trump is doing. Specifically, at the six-month point.

Eighty-Six percent of Republicans are reported to approve of the way that Trump is handling office. The reason why his overall numbers are so low is because only eight percent of Democrats approve of him, which is by far the lowest percentage in history from an opposing party.

With that, let’s talk about dark red states for a second. Dark red states are solidly Republican, so based on the polling information we can extrapolate that Congressmen in dark red states:

A.) Don’t care what Democrats think.

B.) Are generally more at risk in primaries than general elections.

AND:

C.) Are in states in which Trump enjoys considerable support.

Again, it would require two-thirds of the Senate (67 Senators) to remove Trump from office even assuming that the House of Representatives drafted Articles of Impeachment to present to the Senate by committee. The latter requires a simple majority.

Let’s assume for a second that ALL forty-eight Democratic Senators voted to convict President Trump and remove him from office. Even in that scenario, it would require nineteen Republican Senators to vote similarly. That’s honestly just difficult to imagine. You might have a few Republican Senators in left-leaning states as well as a few, “Vote Your Conscience,” types, but I see no way of getting up to nineteen. As the approval rates amongst Republicans for Trump stand now, it would simply be too much of a death sentence for any of them to want to do that.

Currently, here is where the binaries lie on the questions above:

Will Trump be President at Year-End 2017?: Yes: $0.84 No: $0.16

Will Pence be VP at Year-End 2017?: Yes: $0.87 No: $0.13

Again, these two things are essentially the same question. I maintain that you want the, ‘Yes,’ on either one because, for the answer to be, ‘No,’ would require the person in question to die. (Impeachment this year is not happening!)

With that, we want to buy the, ‘Yes,’ as low as we can which, in this case, would be at $0.84 for Trump to be the President at year’s end. The one thing that we do have to look at is the possibility of Trump dying and we also want to take into account any fees/commissions that will come into play. We will look at the Terms & Conditions to find the relevant information, from.

Whenever you sell a share for a higher price than you paid, we charge a 10 percent fee on your profit. The same fee applies if you hold onto your shares until the closing date and they are redeemed for $1.

For U.S. traders, withdrawals are subject to a 30-day holding period after your initial deposit and a 5 percent processing fee.

Withdrawals are subject to a 60-day holding period after your initial deposit, a 5 percent processing fee and a $40 wire transfer fee. You are also responsible for any fees that may be charged by your bank to receive our wire transfer.

The first thing that I want to look at is the probability of Trump dying before then. I’m going to make this really easy, we’re going to call the probability 2% knowing it is less than that. What that means is that our bet, if we make it, has a 2% probability of losing and a 98% probability of winning. With that said, we also want to look at what our profits will be if we do win and subtract 10% from those, and then an additional 5% from the new total balance to cover all the fees. This, of course, assumes it will be the only bet we make.

Okay, if we buy 100 shares for $84, then we will make $16 if we win but will have only $14.40 credited to our account. That will bring our account to a total balance of $98.40, which means that we would withdraw $93.48 after fees. Ultimately, we would either win $9.48 or lose $84 and we are assuming the probability of losing is 2%.

(9.48 * .98) - (84 * .02) = 7.6104

The result is a positive expected value of $7.61, which relative to our total bet of $84 means that we enjoy a positive expectation of 7.61/84 = .090595 or 9.0595%. That’s not an insignificant advantage, better than most advantage plays you’ll find in a casino, even.

Maybe you think that there is a non-zero chance of impeachment, let’s go ahead and assume the actual probability of impeachment and/or death is a combined 5%, then here you go:

(9.48 * .95) - (84 * .05) = 4.806

That represents an expected profit of $4.81, which is an advantage of approximately 5.72619% using the same formula. Again, you can do a lot worse than that!

Even if you believe that the probability of either of those events that would lead to Trump not being President at the end of the year has a combined probability of 10%, as opposed to the implied odds of 16% by the binary, you still have a very slight advantage:

(9.48 * .90) - (84 * .10) = 0.132

Even under those conditions, and taking all of the fees into account, you will enjoy an expected profit of thirteen cents. That represents an advantage of 0.154762%, which is negligible.

I am telling you that the actual probability of Trump not being the President of the United States by year’s end is far less than that, so there is huge value in putting money on the, “Yes,” provided you can get it at or near this price. If the price changes, just use the same math that I have showed you above to determine:

A.) Where you will stand after all fees.

AND:

B.) Whether or not the expected profits relative to your belief of the probability of the event (i.e. of losing) justifies the wager.

I showed you guys the value in the United Kingdom elections of, ‘No Conservative Majority,’ earlier this year and I hope some of you guys got to make a little scratch on that. While I was confident then, I am even more confident about the value of this position now. If not, I wouldn’t put it in an article. Even though I’ve only gone public with a few sports/politics predictions, I have never missed on a single prediction upon which I have gone public.

With that out of the way, we can now take a look at the probability of Trump being in office by year’s end 2018. That market currently stands as follows:

Will Trump be President at Year’s End 2018: Yes $0.65, No: $0.35.

Before we get into the math on that one, I do want to make a few statements about the 2018 question:

1.) There are a ton of things that could happen in nearly seventeen months, so I’m not releasing this as an official prediction and will not be putting money on the 2018 question at this time. The reasons for that have to do with the remaining two statements:

2.) I have no reason to bet on the 2018 question because there is such ridiculous value on the, ‘Yes,’ on the question of whether or not he will be the President at year’s end 2017. The implied odds make it appear to be almost half as likely 16/35 = .45714286 or 45.714286% as likely that Trump will be impeached in 2017 as opposed to 2018. THAT’S INSANE!!!

3.) Money has value, and money that I can do something with has the most value. When I can look at a nearly double-digit percent advantage on something that is going to resolve in a little over four months, I’m happy to put a little piece on that.

Holding up money for nearly a year and a half is a different matter altogether, though. Granted, you can sell your shares early, but the same fees on your profits and your withdrawal will apply. Besides that, why make the bet if you’re not going to see it out until the end. It will take some time for the price per share on the, ‘Yes,’ to go up significantly enough to justify a sale, anyway. Remember, that five percent withdrawal fee is on your TOTAL BALANCE. In other words, if you deposited and withdrew $100 without making a single bet, you would receive $95.

4.) Finally, in addition to the results of the investigation, a number of other things can go down between now and 1/1/2019. There are health issues to consider. I’ll factor that into my guesstimate of the probability of him no longer being President by then, of course, but I’m always one to prefer betting what I know compared to what I think if I have the opportunity to bet on known information.

The 2018 Proposition:

The first thing that we want to look at is the fact that we are going to be depositing $65 to purchase 100 shares for a win amount of $35 if we succeed. That $35 will immediately become $31.50 which will increase our balance to $96.50; a number that will turn into $91.67 (I assume they always round down) upon withdrawal after we have paid that fee.

I still don’t believe that it would be a politically advisable move for any Republican Congressmen in deep red states to vote to impeach Trump until, at a minimum, after the primaries. Personally, I wouldn’t think that is something you want to do until after the General Election out of fear of having an Independent-In-Name-Only run against you in the General Election thereby splitting Republicans into Trump v. Non-Trump factions and running the risk of turning a solid red seat temporarily blue.

Imagine a seat that a Democrat would normally lose by a vote of 65%-35% (or some such), but then the Republican vote gets split equally between two candidates, now the Democratic candidate wins narrowly!

Again, for impeachment and removal to be the smartest thing for a Representative or Senator to do will require that Trump has a high disapproval rating not just amongst Democrats, but also, among his own base. I would say you want to see Trump’s overall approval at around 20-25%, which would indicate something close to 50-50 approval amongst self-identified Republicans.

On the flip side, even if the Democrats were to take over enough of the House/Senate to be able to impeach Trump and remove him from office with the help of some Republican support (especially in the Senate) that wouldn’t happen until the newly elected Representatives and Senators take their seats. Of course, that will be in 2019.

To some extent, I think that some of the bettors on PredictIt are lobbying under the erroneous belief that if the Democrats take over the House/Senate (which is itself a semi-long shot) that they can impeach and remove Trump almost immediately after winning the Election. In short, I think some of the, ‘No,’ bettors just don’t understand the political process very well.

Our $91.67 represents a gain of $26.67 as opposed to losing $65. We can put together a simple equation to determine our break-even actual probability:

(26.67 * x) - (65 * (1-x)) = 0

x=0.709065

What that means is that as long as you assume the probability that Trump remains in office is 70.9065% or greater (compared to the implied probability of 65%) you are at breakeven.

(26.67 * .709065) - (65 * .290935) = -0.00001145 (Slight deviation due to rounding)

In my case, I believe the probability of Trump remaining in office until 12/31/2018 is about 80%. (I actually think it’s a good measure higher, but don’t want to make anyone angry) Using 80%:

(26.67 * .8) - (65 * .2) = 8.336

Which represents an expected profit of $8.34, after fees, and an advantage of 8.33/65 = .12815385 or 12.815385%.

Granted, that’s a greater percentage advantage than before, but that’s mainly because we are depositing less money initially. If that seems strange, it’s because we have to pay the 5% withdrawal fee on the total sum of money (Wins - Fees + Deposit) if we withdraw. Because we are depositing less money, the withdrawal fee applies to less money that we already had in the first place. We are exposing less money to the withdrawal fee itself. That’s also obvious because we are withdrawing more actual total money in the first case.

In addition to the uncertainty over the long span of time, (nearly four times longer) it is also important to consider how much of a relative gain you are making over that time. Simply put, our expected profit of $7.61 over four months is an overall better percentage return (considering time) on our money than an expected profit of $26.67 over sixteen months. The latter represents an expected profit of approximately $6.67 per every four months.

PredictIt Conclusion:

If I am going to bet anything in this regard, then I am going to BUY Trump to remain President by year-end 2017 at $0.84 per share. It’s not even a close decision in my view because there is less uncertainty over the shorter amount of time combined with the fact that I am enjoying a quicker return on my investment.

That’s not even to say that there are not better bets out there with online casino promotions or in land-based casinos. I’m simply saying that, if you want to make a bet on PredictIt concerning a lack of impeachment, that’s the best one on the board right now.

Outside of the United States:

In addition to the other fees on PredictIt, there is also a flat fee of $40 for the wire transfer if you choose to withdraw funds. Fortunately, you don’t have to worry about that if you have access to sites such as Ladbrokes. Ladbrokes (and others) are offering much better odds than PredictIt anyway:

The first thing that we want to do is look at buying 100 shares of:

Will Trump Remain in Office Year-End 2017: No: $0.16

On PredictIt.

The first thing that is going to happen is that you would win $84 if you were successful and Trump is no longer in office by that date. However, you would pay $8.40 in commissions which effectively reduces your winnings to $75.60. When we add that to your original deposit of $16, we end up with a total of $91.60. After subtracting just the 5% withdrawal fee, the result is a total of $87.02 for a profit of $71.02. Of course, that ignores the wire transfer fee of $40!

With Ladbrokes, you can make a bet of $16 at 8/1 as of the time of this writing that Trump will be replaced as President anytime during 2017, which is essentially the same bet. This bet would result in a profit of $128 which would not be subject to any withdrawal fees. Unfortunately, Ladbrokes in ONLY offering a line on Trump being replaced, no line on him not being replaced before the end of the year. (Because it is EXTREMELY unlikely to happen!)

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You could make this bet and print Ladbrokes money for them, but just for the sake of argument, we will see what the probability of success must be for this bet to be breakeven:

(128 * x) - (16 * (1-x)) = 0

X = .11111

In other words, Trump would have to have a probability of being impeached of at least 11.111111% for this bet to be breakeven, as shown:

(128 * .11111111) - (16 * .88888888) = 0

When you’re getting odds as opposed to laying odds, a seemingly minor difference in probability and odds can make a tremendous difference! As you can see, with Ladbrokes’ line, you would have to believe that Trump has a probability of being impeached and removed from office this year of greater than .11111111 or 11.111111% (and you’d be crazy) to have any advantage.

On the other hand, the implied odds at PredictIt stand at 16%, so you’re much better off with Ladbrokes. Even more so when you consider the effect that the fees will have on you at PredictIt:

(71.02 * .16) - (16 * .84) = -2.0768

As you can see, when you factor in PredictIt’s fees, your expected loss based on an implied probability of 16% is staggering. In fact, let’s see what the implied probability would have to be for you to break even based on your would-be profits on PredictIt:

(71.02 * x) - (16 * (1-x)) = 0

X = .183866 or 18.3866%

Whatever you think the actual probability of Trump being removed from office by year’s end is, you’re clearly substantially better off at Ladbrokes than PredictIt. With Ladbrokes, you have an advantage if the actual probability (which can’t strictly be known) is greater than 11.1111%, whereas it must be greater than 18.3866% for you to have an advantage on PredictIt.

Either way, the actual probability, though unknown, is not anywhere close to that. Either bet for Trump to no longer be in office by the end of this year would be foolhardy.

ladbrokes_and_trump

Conclusion:

When it comes to a bet on Trump to either remain in office or be impeached, it is essential for a smart bettor to shop around for the best line or binary option to improve his/her value. When it comes to the question of 2017, it appears that PredictIt may offer one of the only opportunities for individuals to place their money on Trump remaining in office until the end of the year. Being limited to one betting outlet would normally be a problem, but fortunately, the, ‘No,’ bettors on PredictIt are giving the, ‘Yes,’ market a better shake than they’d likely get through a sportsbook proper!

In other words, PredictIt is way overvaluing the, ‘No,’ such that there is an advantage on the, ‘Yes,’ even with the fees involved.

In contrast, due to that very same overvaluing, ‘No,’ bettors would be better off shopping for lines at sportsbooks such as Ladbrokes. While some of the lines may not be as favorable as the binary that can be bought on PredictIt, I have identified at least one that is significantly better at Ladbrokes. Even then, you’d have to be nuts to bet the, ‘No,’ on Trump to remain in office until the end of the year, however, if you must make that bet, do it at Ladbrokes.

Why do you think Ladbrokes offers both sides of a sporting event, but not the possibility of Trump being out of office by year’s end? Here’s the answer: Because, as far as they are concerned, they are printing money with every single bet made. They know, as do I, that all they need is for Trump to live that long.

“Needless to say, anyone at any other job would have likely been fired by now.”

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