French citizens put Emmanuel Macron and Marine Le Pen in the final round of the French presidential election. Did the betting markets get it right?

After months of campaigning, multiple terrorist attacks, and a spreading wave of populism across developed nations, the results of first round of the French presidential election shocked nobody. Centrist Emmanuel Macron and National Front leader Marine Le Pen have moved on to the second round of elections for the French presidency.

While both candidates were expected to win this first round, did betting markets correctly predict the results?

To finish in the final 2

Result: Correct

Right before polls opened yesterday, the betting markets implied that Le Pen had an 86% chance of moving on, and Macron an 82% chance of heading to the second round. Both went on to win handily, as the remaining candidates all conceded after the first results from the France’s Interior Ministry started rolling in around 8:30 pm Paris Time.

First round vote winner

Result: Incorrect

The betting markets thought there was a 64% chance Le Pen would have the highest vote total. However, Macron ended up winning 23.9% to  Le Pen’s 21.4%. Before the polls opened, markets said Macron had a 37% chance to be the top vote-getter.

Le Pen 1st round vote percentage

Result: Correct, with a stipulation

The betting markets implied that Le Pen had a 77.8% chance of earning between 20.1% and 30% of the vote, so bettors would have won on that bet.

However, the the implied probability of the betting odds said that Le Pen had a 14.3% chance of earning less than 20% of the vote, and a 20% chance of getting between 30.1% to 40%. That means that bettors thought the National Front leader would be much more likely to clear 30% of ballots than fail to hit 20% of votes, a bar she marginally cleared.

Before yesterday’s first round, the betting markets implied that Macron had a 60% chance of winning France’s top office. Le Pen was given a 23.1% chance of becoming France’s president.

Today, the story is much different. The betting website Paddy Power is now implying that Macron has an 88.9% chance of winning, while the probability of Le Pen taking the top post is 16.7% (remember, numbers don’t add up to 100%, because the betting website takes a cut of each bet, whether or not it wins).

Grading political bettors

The result of the first round of the French presidential election was as expected: both Macron and Le Pen move on to the final round. However, bettors seemed to think that Le Pen would have a stronger showing. Bettors got the right result, but either underestimated Macron’s appeal or overestimated Le Pen’s momentum.

For this, we’ll give bettors a C+. They got the direction of voting correct, but misread the level of support for the top candidates..

Macron winning more votes than Le Pen sends a strong signal. Bettors think there is little chance the National Front leader can siphon off enough voters to win the presidency, as the vast majority of support from the losing candidates is expected to flow to Macron.

Photo: Ecole polytechnique Université Paris-Saclay, Flickr Commons