Marco Rubio placed third in the Iowa caucuses Monday, but observers liked what they saw from the Florida senator's campaign. Now, the most likely outcome of the GOP presidential primary season is a victory for Rubio, according to bookmakers.
On Monday, bookies gave Rubio a 1-in-3 chance of winning the nomination. Since the results from Iowa came in, Rubio's chances are now better than even, according to data aggregated by Oddschecker.
To be sure, Rubio has a long way to go. Donald Trump and Sen. Ted Cruz (R-Tex.) won more votes than he did in Iowa. Rubio was trailing those two by a wide margin in the most recent national polls.
All the same, economists say that betting markets often better predict the outcomes of elections than polls. When there is cash on the table, people are less likely to be swayed when a candidate receives attention from the fickle media, which might momentarily inflate numbers from polls. On the other hand, bettors who are prepared to put their money on a candidate might be more familiar with that candidate's strengths before the general public is aware of them.
It's not clear exactly what bettors liked about Rubio's showing in Iowa. Maybe it was that they were disappointed with Trump, who polls predicted would take first place. Perhaps they expected more of Trump's supporters to turn out to vote. Trump's field operation has come in for criticism since the caucuses ended, and if his organization has similar problems in other states, he could be a bad bet.
Or maybe bettors think that Trump's appeal is solely based on his braggadocio, which will be harder to sustain now that Cruz has beaten him soundly at the polls. Maybe Trump's voters won't turn out for a loser.
Trump's chances were better than 50 percent on Monday. On Tuesday, they drifted below 1-in-3 as bettors drastically revised their expectations for his campaign.
As for Cruz, his chances improved from about 13 percent to about 17 percent. That modest change suggests bettors are still skeptical that Cruz will be able to replicate his success in other states. He won in part because evangelical voters turned out in large numbers to support him, and there are fewer of those voters outside Iowa. In other words, the betting markets suggest that Rubio, not Cruz, is best positioned to exploit any stumble by Trump.
On the other side of the aisle, bettors threw cold water on the enthusiasm of Bernie Sanders's supporters. Their candidate beat all expectations by holding Hillary Clinton to what was effectively a draw. She'll have just two more delegates from Iowa than Sanders.
Some pundits have argued that Clinton's poor performance in Iowa revealed her weaknesses as a candidate. According to the bookies, though, the odds that the Vermont senator wins the nomination haven't improved at all. They remain at about 20 percent, about where they've been for the past six months.
Perhaps the markets don't think Sanders has the organizational capacity to exploit those weaknesses, or maybe they think Iowans are uniquely receptive to Sanders's message. In any case, the results of the caucuses haven't changed bettors' views. Clinton is still strongly favored.
Correction: An earlier version of this item inaccurately stated that Donald Trump won more delegates in Iowa than Marco Rubio. Trump won slightly more votes, but both won seven delegates. This version has been corrected, and we regret the error.