NEW YORK -- Speculators on the inner workings of Washington have begun to place bets on what might happen if U.S. President Donald Trump's coronavirus infection makes him severely ill -- namely the possibility of a President Mike Pence.
New Zealand-based PredictIt is a real-money prediction market for political events. Users place bets by purchasing a "share" in a political outcome, whose price increases with its perceived likelihood, and win $1 for each correct share bought.
Following Trump's tweet Friday that he tested positive for COVID-19, shares predicting the vice president, his running mate, will run for president surged to 17 cents from 4 cents on PredictIt. Pence shares have since been trading at about 10 cents.
For Pence to run, Trump would have to withdraw from the race. This is still not considered a likely scenario. But the price increase indicates that bettors believe there is a 10% to 20% chance that Trump could drop out of the race.
Observers will be watching closely to see how Trump's condition develops. Though it was reported Friday that he had only mild coldlike symptoms, the president is 74 years old, putting him at higher risk for severe illness. His Twitter account is likely to be followed more closely than ever.
Even if Trump recovers with no complications, his COVID-19 infection is certain to have an effect on the election. The president is in isolation and media reports suggest presidential debates scheduled for this month could be postponed.
The news has also further fueled criticism of Trump's handling of the crisis, given the president's disregard for face masks as a means of curbing the spread of the coronavirus.
The injection of additional uncertainty into an already unpredictable election has shaken investors. U.S. stocks opened sharply lower Friday, while the CBOE Volatility Index, or VIX, has spiked, reflecting expectations of large price swings going forward.