Prediction Market Offered For Mayoral Race

Think you have the inside track on who will be Milwaukee’s next mayor?

You can now put some money on it.

Predictit, a New Zealand-based prediction market, is offering individuals the ability to wager on who will (or won’t) win the April 5 general election.

Similar to January push poll results, Acting Mayor Cavalier Johnson has a commanding lead on the field. But that’s where the similarities stop. Sheriff Earnell Lucas is priced in second, followed by former alderman Robert Donovan, Senator Lena Taylor, Alderwoman Marina Dimitrijevic and Michael Sampson. The seventh candidate in the race, Ieshuh Griffin, is not included in the market.

Unlike a casino sportsbook, users are betting directly against other betters instead of against the house. Users can only make a trade that another anonymous user is willing to take the other side of.

For example, buying a single “contract” for Johnson to be declared the winner is currently offered for $0.75. Buying a contract that he will lose costs $0.33. The winning side is paid out $1 and the value of the losing side contract drops to zero. As a result, the less likely an outcome is perceived to be by the market the cheaper its contract becomes.

At the time of publication, the market has priced Johnson at $0.75/$0.33 (win/lose), Lucas at $0.11/$0.91, Donovan at $0.08/$0.94, Taylor at $0.06/$0.96, Dimitrijevic at $0.05/$0.96 and Sampson at $0.02/$0.99.

Users are capped at $850 per event. To cover its operating expenses, Predictit charges 10% on earnings and a 5% withdrawal fee.

Is it legal? At best it exists in a gray area. Given its nonprofit status and university ownership, it secured a “no-action letter” in 2014 from the U.S. Commodity Futures Trading Commission. But it does not have a state-level exemption in Wisconsin. State statute 6.03 also prohibits wagering on an election one votes on.

The primary, which will narrow the field to two candidates, is Feb. 15. Early voting is already underway.

The mayoral race isn’t the only Wisconsin race Predictit is following. There are six other markets open, including nominees and party winners for the fall U.S. Senate and gubernatorial races.