Schwarzenegger Will Win California Recall, Futures Bettors Say
Oct. 6 (Bloomberg) -- Arnold Schwarzenegger is the favorite of futures bettors to replace California Governor Gray Davis, whose chances of being saved from a recall tomorrow have fallen to 1-9, according to contracts on TradeSports Exchange Ltd.
Bettors at Dublin-based TradeSports are paying $1.30 for a contract that would pay $10 should Davis remain in office after Tuesday's recall vote. The exchange offers contracts on events from the winner of the baseball World Series to whether Yasser Arafat will be ousted as head of the Palestinian Authority.
A contract that Schwarzenegger wins the election last sold for $7.70, recovering from a drop last week over allegations that the former bodybuilder groped several women and once said he admired Adolf Hitler. The price indicates there is a 77 percent chance that Schwarzenegger will be elected governor of the most populous U.S. state, said John Delaney, TradeSports chief executive.
``The recall is going to happen, and Arnold looks like almost a certainty to win,'' Delaney said in a phone interview.
In total, more than 65,000 contracts have been made on the recall election since TradeSports began offering them in August, Delaney said. That's about a third of the contracts taken out on who will win the Democratic presidential nomination -- which have been available since January.
The contracts will be settled when the results are final, and trading could occur after the Tuesday election if the election is too close to call or if the results are challenged.
The contract on whether Davis stays in office traded as high as $5.60 in late September and has plunged since to close today at $1.30. The contract that fellow Democrat Lieutenant Governor Cruz Bustamante would win peaked at $4.50 in early September, and last traded for $1.20.
``The numbers have basically gone one direction since the middle of September. They've been falling off the cliff for both Davis and Bustamante,'' Delaney said.
The only other prominent Republican in the race besides Schwarzenegger, state Senator Tom McClintock, is given a slim chance by bettors. The contract that he will win now trades at 1 cent after falling from a high of 5 cents on September 19.
Schwarzenegger's contract went as low as $3 in September and traded as high as $8.50 before closing at $7.70 today. Delaney said the contract dipped last week into the mid $6-range.
``Arnold continues to trade up,'' Delaney said. ``Based on the TradeSports market, the overwhelming probability is that Arnold will be the next governor.'' |
