By Aaron Saldanha and Divya Chowdhury
(Reuters) - Republican U.S. President Donald Trump is gaining momentum in betting markets and has narrowed Democratic presidential candidate Joe Biden's lead over himself, according to Betfair Exchange, operator of the world's largest online betting bourse. Betfair Exchange's prices on Wednesday implied Biden has a 54% probability of winning, compared with 45% for Trump.
"In March, Trump was still ahead on (Betfair Exchange) markets," Paul Krishnamurty, political betting expert at Flutter Entertainment unit Betfair, told the Reuters Global Markets Forum (GMF) on Wednesday.
"Once the nomination was secured, the betting between him and Biden tightened considerably. By early June, Biden had become favorite and he hit a peak rating of 62%."
(Graphic: U.S. presidential election betting volume on Betfair Exchange, https://fingfx.thomsonreuters.com/gfx/mkt/azgponkawvd/Pasted%20image%201598446536256.png)
Odds between Trump and Biden had begun narrowing in late July, betting market aggregators PredictIt and GVC Holdings unit Ladbrokes (LON:LCL) Coral told GMF at the beginning of August.
Trump has clawed back some ground due in part to the controversy over the possible use of postal ballots in the election, Krishnamurty said.
"A big rise in postal voting would help Biden; however, some bettors fear the postal votes won't be counted accurately."
(Graphic: Candidate's implied probability (% terms) of winning election during the year s/he ran, https://fingfx.thomsonreuters.com/gfx/mkt/xlbvglbjopq/Pasted%20image%201598446770041.png)
Biden's chances of winning the Nov. 3 election are still lower than those of 2016 Democratic candidate Hillary Clinton, Krishnamurty said.
"On August 26, 2016, Hillary Clinton was a 77% chance compared to 21% for Trump."
However, Biden is leading in swing states that Trump won in 2016, at an implied probability of 68% in Pennsylvania, and 60% in Wisconsin. He is also "well ahead" in Michigan at 73% and in Florida at 54%, Krishnamurty added.
"Those two states (Michigan and Florida), if nothing else produced a different result from 2016, would get Biden past the winning line in the electoral college."
(This interview was conducted in the Reuters Global Markets Forum, a chat room hosted on the Refinitiv Messenger platform. Sign up here to join GMF: https://refini.tv/33uoFoQ)