Legal and Regulatory

Wanna Bet?

If you had to place a wager, how do you think the 2022 midterm elections will turn out? Key indicators and metrics from the gaming market point in a clear direction.
By Vance Walter
August 4, 2022
Topics
Legal and Regulatory

At the intersection between the patchwork of new laws regulating the revenue-rich gaming business and the U.S. government’s official position that betting on the results of U.S. elections is illegal sits a virtual political commodities market where capital-based forces reign supreme by placing value or “odds” on election results. While the legalities of these markets are outside the scope of this article, they’ve emerged as an increasingly valued and accurate precursor to what will happen in any given political campaign.

Americans have been placing bets on the results of political campaigns since the dawn of the republic. But today, campaign betting has been culturally and technically accelerated by the global integration of the internet, affording thousands of virtual betting parlors like PredictIt.

As political pundits continue to apply their education credentials, experience and expertise to their predictions for the quickly approaching 2022 midterm elections, history and the odds used in the gaming market prove to be just as accurate a metric. Let’s start with the basics: the betting line, the spread and the parlay.

To understand the betting line, let’s say that the Tampa Bay Buccaneers (-300) and the Kansas City Chiefs (+110) are playing in the Super Bowl. The -300 means that you’d have to bet $300 on Tampa Bay to win $100, a prohibitive favorite. The +110 means that you’d win $110 if you bet $100 on the Chiefs. The betting line changes dramatically even during the game depending on a bunch of variables (injuries, play during the regular season, etc.).
With spread betting, each team is given certain points that they have to meet or cover for you to win your bet. The Buccaneers might be -8 while the Chiefs might be +5, meaning that Tampa Bay would have to win by more than 8 points for your bet to pay off, while the Chiefs could lose by 4 points for you to win your bet.

A parlay bet is made up of several other bets linked together, so they’re treated as one big bet—win all and win, or lose one and lose all.

Currently, one consensus odds maker has the lines on the political futures of both chambers of Congress’ next majority party as:

  • U.S. House of Representatives: Republican control (-714)
  • U.S. Senate: Republican control (-333)

For the purposes of this article, these lines are simply a point in time and will certainly vary as odds makers test political winds until Election Day. These lines, however, aren’t timid in telling the public one thing: Change is coming, as Republicans are increasingly seen as overwhelming favorites to take control of both chambers of Congress.

U.S. House Outlook

In the last three midterms (2018, 2014 and 2010), the average turnover was 40 seats in the House. With history as a guide, given current trendlines—the historically Democratic-leaning generic ballot now favoring the GOP, President Biden’s job approval hovering around the dismal 40% mark and Americans’ pessimistic perceived state of the economy—the logical bet is for a Republican House majority in 2022.

Due to the redistricting process following the 2020 census, however, many competitive House races were taken off the political map. As a result, there are only about 59 seats currently occupied by Democrats that are considered competitive in 2022, meaning Republicans would have to protect 21 of their own seats that are considered competitive while also winning most of the Democratic seats to reach the average gain of 40 seats. However, if the 2022 cycle is a historic-wave election in that the pendulum swings unprecedentedly away from Democrats—as is supported by history and current data—there could be an extra layer of Democratic House members who, although protected, would be upset in November.

Whether the 2022 elections reflect a historic wave or just a repeat of historic averages, with a margin of only six seats to gain a majority, the safe bet would be on Republicans taking control of the House.

U.S. Senate Outlook

If Democrats are to retain their hold on the Senate, they’ll need to carry the four competitive seats they currently hold: Arizona, Georgia, Nevada and New Hampshire. Of course, they also must sweep each of the other states they currently hold, Washington and Colorado being the most competitive. With competitive challengers in each state, that is a tall task—and all of that simply to retain their 50-seat majority, in which they still control the tiebreak through 2024 thanks to Vice President Kamala Harris.

Should Democrats lose any of those races, they must augment every loss with a subsequent gain in any of their four competitive pickup targets: Pennsylvania, Wisconsin, North Carolina and Ohio. Certainly, Democrats will seek an outside shot at an upset in one of the other Republican-held states such as Florida, Utah or Missouri, but even with relative optimism, that prospect is hard to conceive.

Unforeseen Variables

While history should be considered, a number of unforeseen variables could change the temperature of these metrics over the next several months.
Economic variables: Far and away, the No. 1 issue driving Americans to the polls in the midterm elections is, and will likely remain, inflation. Regardless of the factors driving inflation, the simple fact that the inflation rate sat at a record-high 8.5% in March 2022—after tracking at just 1.7% in April 2021—spells disaster for anyone with decision-making power.

Social variables: This means Amendments 2 (guns) and 14 (abortion). Will the mass shootings that have occurred over the spring and summer and the legislation considered afterward (or not considered) have any effect on the 2022 midterms? And how will SCOTUS’ reversal on Roe v. Wade change voter registration drives and ultimate turnout?

Voter turnout: Enthusiasm is always one of the many look-back factors in the losing column of elections. Currently, the Republican base looks to be more enthused to turn out in the midterm elections, with considerably higher rates in the primaries that have occurred so far. For example, Democrats typically have a clear edge in always-relevant Pennsylvania, but there are signs that their advantage there is waning.

First, the 2022 primary turnout for both parties was huge, particularly for Republicans; in fact, compared to the 2018 midterms, Republican participation was up 92%. Democrats also performed well in this year’s Pennsylvania primary, increasing their turnout by 58%. But that doesn’t match the scale of the Republicans’ 1.34-million voter turnout for the 2022 primary, which is even larger than the party’s 2020 presidential primary participation of 1.14 million.

Relevance for Construction

The socioeconomic factors—coupled with the fact that Democrats have unusually narrow majorities in both chambers of Congress—suggest that a workable majority is attainable with even an average gain of seats in either chamber. Further, if the limiting factors referenced above don’t come to fruition, then a truly historic House majority and the potential for Republicans to control the Senate for a generation (given the generous 2024 Senate map) could be in play.

Additional context on the importance of the margin of victory:

  • For a majority greater than the post-1994 “Contract With America” wave, Republicans need to win 18 seats.
  • For a majority greater than the 2010 “Tea Party” wave, Republicans need to win 30 seats.
  • For the largest majority since the Great Depression, Republicans need to win 35 seats.

As we learned through this Congress’ relative troubles to combat slim majorities, the range of seats won by Republicans will greatly determine the ability for congressional leaders to pass legislation through a governable majority—or lose the bulk of an agenda to gridlock. However, if just the average number of House and Senate seats from the last three cycles is won, then Republicans will have considerable majorities in both chambers.

For the merit shop construction industry, this would be welcome news, as the industry has combated an overly burdensome regulatory environment exacerbated by an anti-merit-shop agenda in the U.S. House and Senate over the past two years. With the industry facing a workforce development challenge—650,000 more workers needed just this year—as well as persistent uncertainty in the supply chain and construction materials markets, the Democrat-controlled House and Senate have chosen to pursue anti-growth policies such as the Protecting the Right to Organize (PRO) Act. Similarly, the Biden administration has squandered the positive effects of the bipartisan infrastructure bill through Executive Order 14063, which mandates project labor agreements on all federal projects over $35 million, and other regulations pushing PLAs and expanded Davis-Bacon regulations on state and local construction projects receiving federal assistance.

Although the Biden administration will continue to pursue its regulatory agenda regardless of congressional control, in the years to come, any more-permanent legislative victory will have to pass in what is likely to be a much more conservative, pro-business environment.

As easy it would seem to listen to the pundits, history and the market are stubborn things to ignore. With that in mind, here are the current odds—U.S. House of Representatives: Republican control (-714); U.S. Senate: Republican control (-333); control of both chambers: R House, R Senate (-286); R House, D Senate (+426); D House, D Senate (+1011); and D House, R Senate (+3233).

At least for now, the market has a clear favorite: Republicans.

by Vance Walter

Vance works for Associated Builders and Contractors’ Government Affairs division. Prior to joining ABC, Vance worked in the polling industry. He is a graduate of the University of Arizona and resides in Washington, D.C.

Related stories

Legal and Regulatory
Final Build America, Buy America Act Guidance Released
By P. Lee Smith and Greggory C. Maddaleni
This new guidance tightens U.S. content requirements for federally funded infrastructure projects, expands the definition of infrastructure and provides calculation methodologies for manufactured products.
Legal and Regulatory
A Look at Trending Legislative Changes Impacting Workers' Comp
By Rosanna Shamash
Could three recently enacted changes in New York State affect workers' compensation cases across the country for the construction industry?
Legal and Regulatory
How to Get the Most Bang for Your Buck Out of the Infrastructure Bill
By Rich Meene
The Infrastructure Investment and Jobs Act authorizes $550 billion in new funding for infrastructure projects. Here's how to position your company for success when pursuing these opportunities.

Follow us




Subscribe to Our Newsletter

Stay in the know with the latest industry news, technology and our weekly features. Get early access to any CE events and webinars.