As 2016 comes to a close I was reflecting on some of the events that occurred this year, and the associated probabilities with those events. I also contemplated these events occurring independently, and as part of a sequenced parlay bet. Most of the time year’s go by with no real deviations from the norm. But once in awhile there is a year where improbabilities become the reality. 2016 was a year where perceived unlikelihood’s, were transformed into actualities. Three unlikely world events that stuck out in my mind are the United Kingdom exiting the European Union, the Chicago Cubs winning the World Series- arguably not a world event, but as a person with firm roots in Chicago it sure felt like it was, and lastly Donald Trump winning the Presidency of the United States.
First, I want to make it clear that I am not pushing any political ideology involving the “Brexit” vote, and more closer to home the polarizing election of the new US President, I am just evaluating whether or not the long shot status that were bestowed upon these events, political and not, were deserving of the label. I do my best to side step my own biases to get a clean and objective analysis.
Over the past 15 years or so Nigel Farage the outspoken member of the British Parliament-their equivalent of the United States House of Representatives’, has been on a mission to get the UK to remove itself from the EU. Depending which side you come down on his arguments either made sense or were completely insane; a common paradigm for any political argument. But in the end the people of Great Britain evaluated their individual economic status as well as their status in the world and from the results of the vote (in a simple majority) didn’t approve of the current track of their government. About a week before the vote the Nays were up by about 10 points over the Yays.
Next, the Chicago Cubs winning the World Series; if you would have told anyone in 2013 that the Chicago Cubs were going to win the World Series in 2016 they would just look at you with a look of derision and befuddlement. Of course this likely was just a knee jerk reaction to the standard anthem of most Chicago north side residents of “Wait till next year!” Theo Epstein, the General Manager who broke the “Curse of the Bambino” for the Boston Red Sox was brought in to try his hand at breaking the ever feared “Billy Goat curse” that lingered over the Chicago Cubs since 1908. He moved the pieces around the chess board in way that gave the Cubs the optimal chance to win, and they did just that.
The 2016 US Presidential election has been called the biggest political upset in the 200 plus years of its history. There were countless “news” casts where main stream news anchors were constantly berating the chances of Donald Trump as the Republican nominee for President not to mention putting it at an impossibility of a President Trump. There reasons were numerous, and were supported by polling from what were, till November 2016, considered to be very reliable. Politicians and celebrities lined up one after another, all to display their angst for the Businessman turned Reality TV star turned Politician. All signs, at least from the major news networks pointed to another Clinton Presidency, but this was grossly misconstrued. Polls as close as November 1st put Trump 11 points behind Clinton.
The perceived rarity of these events, were all well defined by the media. But I wanted to see if these events were reasonably foreseeable and at least could be put into a toss-up category. I poked around and spoke with several well respected statisticians including Michael Shackelford of the dominant gaming and strategy website Wizard of Odds, and writers who were familiar with the events. The Brexit vote was predicated on a changing Europe. A change that many felt weren’t in the best interest of the citizenry of that country. For years the UK had been slowly losing its sovereignty to the EU and that coupled with declining economic conditions caused the public of that country to feel disenfranchised and when a group feels disenfranchised they vote in herds for a change and thats exactly what happened. The margin narrowed leading up to the vote and the late momentum was with Yay votes. In the end the Yays had it. This was completely foreseeable.
The odds of the Cubs wining the World Series at the beginning of the 2016 season were 5-1. It was well anticipated that the Cubs were going to have a strong season. The Las Vegas bookmakers weren’t too keen on the idea of the Cubs not making it to the World Series. Many sports writers also anticipated the strong finish; long time sports columnist and senior writer for The Casino City Times John Grochowski, is a Chicago native and was among the group that anticipated the Cubs at least making it to the World Series. We spoke about this often during post season and he was hardly surprised when they made it to the championship game. Most of the skepticism about the Cubs comes from their long history of falling apart down the stretch. From a strict numbers point of view the Cubs were the favorite to win the MLB Championship, so this was no big surprise.
The last event is the US Presidential election. The polls indicated an overwhelming victory for Hillary Clinton. So what happened? Well the nice thing about polls, like any accounting protocol, is that you can pretty much report any numbers that you want as long as you let everyone know what you did in the summary page of the report. So what did they do? And why did the media not report the full story. First, most of the polls were oversampled and skewed in a way that gave the perception of a democratic victory. This means that groups of people that traditionally favor the Democratic candidate were asked in greater numbers than those that favor the Republican candidate. Instead of 33%, 33%, 33%; Democratic, Republican and Independent sample that makes up the electorate, the samples were in the neighborhood of 40%, 30%, 30%; A clear skew in the direction that favored Secretary Clinton. Another contributing oversight was the assumption that minorities would turn out in the same numbers that they did for President Obama. The reasoning for why the media outlets didn’t report this is because they didn’t want to. Mark Twain once said “ if you don’t read the newspapers you’re not informed and if you do read the newspapers you are misinformed.” I believe that the media has no interest in reporting the news they just want to shape opinion.
These events were not as unpredictable as they were made out to be. They were in fact a real possibility. I read that if 2 years ago you would have made a 100 parlay bet on these three events occurring, you would have won 50 million dollars. This seems high to me now, or even at the beginning of the year, but it does seem reasonable if you take into account that no one even had these events on their radar 2 years ago. The astute numbers driven student always tries to make an informed decision, and doing so in this instance would accurately conclude that these series of events had a better chance of happening than not happening.
Nicholas is the Managing Director of Alea Consulting Group, a casino gaming consulting firm with a player centric philosophy.
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