Thursday, April 5, 2012

Intrade: Santorum Below 1 Percent

After losing the Illinois Primary a few weeks ago, Rick Santorum had dropped to a 2.5% chance to win the nomination, according to the Intrade market on the Republican nomination. After losing the Wisconsin Primary, Santorum's odds have hit rock bottom: He's currently trading at 0.7%. Mitt Romney is inching closer to the 100% mark, trading at 96.0%. For the first time, no other candidate is even in single-digits; Romney's competitors are all below the 1% mark.

Ron Paul, despite having failed to win a state so far, is in second place at 0.8%. Newt Gingrich is truly close to 0%, trading at 0.2% along with several candidates who didn't run (Sarah Palin, Chris Christie, Paul Ryan, etc.). Jeb Bush, who for whatever reason is a partial stand-in for the chance of a contested convention, is ahead of Gingrich, at 0.6%. But Intrade investors also feel the odds of a contested convention have fallen substantially: They give it just a 3% chance of occurring.

In fact, the Intrade markets on individual contests appear to be predicting an all-out sweep for Romney from this point forward. Before Wisconsin, they felt Santorum was relatively safe in his home state of Pennsylvania, giving him about a 2/3 chance of winning there. But now they rate the probability of a Romney upset in Pennsylvania at 84.7%. And Romney is almost certain to steal the big Southern prize, Texas: 92.4%, according to Intrade.

Intrade's high level of confidence of Romney winning Texas is particularly interesting, given Romney's weakness in the South so far. One possible explanation is that Intrade investors foresee Santorum dropping out of the race prior to the Texas Primary (May 29th). If they're right about Romney winning Pennsylvania, it's a real possibility.