Believe it or not, there are political futures markets where wagers are being taken on presidential candidates, just as if they were pork bellies, soybeans, ethanol, precious metals or foreign currencies.
Through a number of Web sites, including one operated by the University of Iowa's business college, traders can place bets on, for example, who'll win the Republican or Democratic nomination next year.
Anyone can follow the several political future markets online, often through detailed graphs that show the ups and downs of each major candidate's value as determined by trading over time.
"It's kind of a fun thing to play with, and of course, it's the people who are political junkies who typically do," said Kirk Jowers, director of the University of Utah's Hinckley Institute of Politics.
While Jowers said he never actually plays the markets, he does keep an eye on them, sometimes sharing a candidate's ups and downs in trading as part of his classroom discussion on presidential politics.
"I am a big believer in finding all sorts of ways to make politics more interesting to students and the community. I think the markets do that," Jowers said. "People who are into stocks pay more attention because the format is something they understand."
Some Web sites, like www.newsfutures.com, use only "play money" so traders can't actually win or lose cash. But the University of Iowa and Intrade, a for-profit Web site based in Ireland, do require a financial investment to participate.
Presidential politics is just one category of trading at Intrade, which takes bets on just about anything, including the chances of Osama bin Laden being "captured or neutralized" or if CBS Evening News anchor Katie Couric will be gone by the end of the year.
University of Iowa finance professor Tom Rietz said in a recent telephone interview that the Iowa university's market was created for educational purposes — not to make money like the sometimes controversial Intrade.
"We're not profiting from this enterprise," Rietz said. "There's no bookies or anything like that."
He said what's been learned by studying the Iowa university's political futures market since its creation in 1988 is that the market has been more accurate than polling in predicting who would win the White House.
Rietz said when compared to nearly 1,000 polls, the market was closer to the election outcome 74 percent of the time. Market players have a vested interest in predicting how the electorate will vote, he said, while pollsters capture the public's views at a given moment.
"People have money at stake, so they'll get their opinions right," Rietz said.
Utah pollster Dan Jones said there's some truth to that view. "I think they have to reach to say that," Jones said. "But polls are asking people about their behavior, and opinion doesn't always lead to behavior."
Currently, the Iowa university's market has New York Sen. Hillary Clinton heavily favored to win the Democratic presidential nomination, trailed by Illinois Sen. Barack Obama and former North Carolina Sen. John Edwards.
On the GOP side, the market's money is on former New York City Mayor Rudy Giuliani. But he has a smaller lead than Clinton over his closest Republican rivals, former Massachusetts Gov. Mitt Romney and former Tennessee Sen. Fred Thompson.
And come November 2008, the odds are that Democrats will win the election.
Participants in the Iowa market open an account with a minimum of $5 and a maximum of $500, then buy "contracts" for $1 apiece that will pay off $1. But they also can buy and sell contracts among themselves and risk wins or losses in the market — just like Intrade.
That raises questions about whether Utahns can legally participate in such markets. The state not only prohibits gambling in general, there is also a law specifically banning wagering on the outcome of political elections.
Thom Roberts, an assistant Utah attorney general, stopped short of issuing an opinion on the legality of Utahns betting on who'll win the presidential race through the Web sites, but suggested there could be problems.
"It raises the issue that if people in Utah were to do it, they might be gambling here in Utah," Roberts said, dismissing claims that the political futures markets are no different than other commodities or stock trading.
But that's how Rietz sees it. "Gambling is set up so the house always wins," he said. "Market trading involves risk, just like gambling involves risk, but your profits depend on your information and skill."
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