Tracking Texas Senate Odds One Week from Election Day: Trade Midterms Prediction Markets

• The midterms are now a week away, and Texas Senate odds are among the most closely tracked markets for the upcoming elections
• The contest between the Lone Star State’s Republican AG Ken Paxton and Democratic state Rep. James Talarico has Talarico ahead in every poll, a stunning development in the unabashedly red state
• Prediction markets are heavily favoring Talarico, but there is always the lingering reality of the solid Republican state flirting with Democrats and ultimately sticking with their party’s candidate

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Perhaps the most watched Senate race for next week’s midterm elections is in Texas, where Republican state AG Ken Paxton is trying to hold onto the seat against upstart Democratic state Rep. James Talarico. Texas Senate odds have been a hot topic as prediction markets are closely tracking the races for upcoming midterm elections.

Reputable polls show Talarico slightly ahead, but all are well within the margin of error. The easy answer to explain this in the conservative state is that moderate GOP voters and centrists who tend to vote Republican would have preferred sitting Senator John Cornyn to get the nomination. But President Donald J. Trump subtly forced Cornyn out of the race because the veteran senator refused to serve as a rubber stamp for the president. They are unsure about Paxton and are uncomfortable with his professional and personal behavior, but they are not yet ready to commit to crossing the Rubicon and voting for the Democrat.

In recent history, no Democrat has been elected to the U.S. Senate by Texas since Lloyd Bentsen; the state’s default setting is to vote for the person with the “R” next to their name no matter who they are and what they have done. The widely disliked Ted Cruz epitomizes that. But the combination of Trump’s unpopularity, changing state demographics, Paxton’s issues, and Talarico selling himself as a different kind of Democrat who is an outspoken Christian has widened the crack in the door for a Democrat to overcome the natural predisposition to just stick with what they know and vote for the Republican.

Prediction markets are tracking this race and weighing the factors that have put what should be a safe Republican Senate seat in play. Those who want to jump in can secure a good profit if they are correct in which candidate wins.

Texas Senate Odds Favor Talarico with Midterms Next Week

Trading volume for this market is beyond $47 million and will continue to rise as Election Day draws closer.

Market probability has Talarico far ahead, with his percentage in the mid-60s. Paxton is in the mid-30s.

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James Talarico (D)

The 37-year-old Talarico has a lot to like for Texas voters. If he were a Republican, he would presumably have an upward trajectory that could lead to the Senate, a run for governor, and perhaps beyond if he has presidential ambitions. But he’s a Democrat and is unusual in that he’s wide open about his Christian beliefs. Despite his relatively young age, he has been in the Texas House of Representatives for eight years.

The GOP has tried to portray him as having issues to hide stemming from a two-week absence from the campaign trail with what he said was a bad case of the flu. Given Paxton’s apparent moral and ethical failures, anything the GOP comes up with to sully Talarico as an “October surprise” would need to be quite bad for it to surpass Paxton’s negatives. Those negatives have managed to put the seat in play to begin with.

The question for him is whether there will be sufficient Democratic turnout and enough Republicans to cross party lines as a protest against Trump and because they dislike Paxton.

In other states, the answer would be a more definitive “yes” than it is in Texas since the state has, for the past four decades, been viewed as ripe for a Democratic takeover in national elections but has always retreated to its Republican sensibilities.

Ken Paxton (R)

That the race is even close and Paxton has a good chance to win, given the endless number of scandals that were known and are coming off the conveyor belt seemingly on a daily basis, speaks to the state’s status as ruby red. Going back to his days in the Texas House of Representatives, Paxton was accused of a variety of misdeeds or outright illegal acts, including pushing laws to help business associates and enrich himself; retaliating against whistleblowers; obstruction and false statements; and accepting bribes. He was impeached by the Texas House as AG, but acquitted in the state Senate.

In his personal life, he was accused of infidelity and is going through a contentious divorce, though his estranged wife has said Texans should vote for the Republican for Senate. She didn’t say his name.

More recently, he was alleged to have had a confrontation in London with a tourist who filmed him walking with his female companion; took taxpayer-funded trips after his impeachment when he was not supposed to be taking part in supposed official business; and traveled to Dubai with U.S. fugitives from justice who had been indicted for fraud and embezzlement.

There’s more.

Or there will be more.

Despite that, the number of scandals is taking the tone of The Simpsons, with Mr. Burns’s age-related health issues being so numerous that they were stuck in a figurative doorway so one or more couldn’t break free and result in the logical conclusion of his demise.

How much more can there be than what’s already known or alleged? And how much worse can it be to spur those who were going to vote for him anyway to either switch to Talarico or stay home?

That’s what the race will hinge on. Paxton needs just enough Republicans to vote for him, even if they don’t like him, to overcome the impetus for the race being competitive in the first place.

Right now, it’s a toss-up despite the market probabilities, with great profit to be had regardless of which candidate investors choose.