Gambling on the Presidency
The College of Business Administration at the University of Iowa runs the Iowa Electronic Market, a futures market on this year's presidential election. Anyone can buy a contract on President Clinton, the yet-to-be-designated Republican candidate, or someone else. It's a winner-take-all market: Contracts on the winner pay off at $1 on November 6, while others expire worthless. On the day of the New Hampshire primary, Clinton's contracts, which had risen in recent weeks, were bid at 51.1 cents, while those of the Republican stood at 39.3. Political insiders watch these Iowa numbers closely: In the two last presidential elections, the Iowa futures market accurately predicted the results at the ballot box.
Gambling used to be considered deeply reprehensible, especially by conservatives. Gambling casinos were shunned by respectable people and politicians (who we do not mean to imply were distinct from one another). No more. As the New York Times reported in December, gambling interests have emerged as either the biggest or nearly biggest legislative lobbies in such states as Illinois and Louisiana. The president of the American Gaming Association, Frank J. Fahrenkopf, Jr., is a former chairman of the Republican National Committee. The day after denouncing the values of Hollywood last summer, Senator Dole went to a Las Vegas country club for a big fundraiser organized by Steve Wynn, one of the leading figures in the gambling industry.
The new respectability of gambling suggests that we might be able to take the Iowa futures market one step further. While no one has yet noticed it, here is a solution to the problem of campaign finance. Instead of just asking Americans to contribute to political campaigns, we can also invite them to gamble on one. Steve Forbes has already shown the way by gambling millions on his own campaign. In fact, besides adding an item for presidential gambling to the 1040 and requiring motor-voter betting, we could combine the actual election with one last gamble, taking advantage of the resemblance of a voting machine to a slot machine. The "house" could easily skim off enough to cover the costs of campaigns.
To be sure, some conservatives may object to this proposal--on the grounds that, once again, government would be undertaking an activity that properly belongs to private enterprise. This objection may be overcome by contracting out elections to the casino industry. Donald Trump might even suggest that we use gambling results in place of balloting, but the smart money is against it.