Summary: New Jersey's gubernatorial election presents a market puzzle: Why are prediction markets pricing Sherrill at 88% when polls show a dead heat? Understanding what markets see that polling misses.
The Market Puzzle
Tomorrow's New Jersey gubernatorial election presents a fascinating market puzzle: Why are prediction markets pricing Mikie Sherrill at 88% when polls show a statistical dead heat? This isn't just about who wins Trenton—it's about understanding what prediction markets see that traditional polling might be missing.
Polls vs. Market Odds
Here's where it gets interesting. The latest Emerson poll has Sherrill at 49% to Ciattarelli's 48%—well within the margin of error. AtlasIntel (rated A+ by Nate Silver's team) shows Sherrill up by just 0.9 points. Yet Polymarket has her at 88%, Kalshi at 85%, and PredictIt pricing Democrats as clear favorites. Let that sink in: markets are pricing an 88% probability while polls suggest a coin flip.
What the Smart Money Sees
So what's the market seeing? The smart money appears to be betting on early voting data as a more reliable signal than polling. Over 1.1 million ballots cast so far: 614,000 from registered Democrats versus 347,000 Republicans. That's a meaningful structural advantage, and markets are weighting it heavily.
The Contrarian Case
But here's the counterargument that has some traders hedging: In 2021, Ciattarelli massively overperformed polls, losing by only 3% after being down double digits. Democrats led early voting by 17 points that year but won by just 12 overall. The market's 12% probability for a Ciattarelli win seems to be the discount for this "2021 repeat" scenario.
Wild Cards in Play
Several variables are keeping this from being a total consensus play: Trump is hosting a 7:30 PM tele-rally tonight specifically to boost GOP Election Day turnout. If Republican voters show up disproportionately tomorrow while Democrats already banked their votes early, the math changes. Election monitors being sent to Passaic County due to past mail-in ballot fraud concerns creates uncertainty around ballot integrity—the kind of tail risk that keeps markets from going to 95%+. No party has held the NJ governorship for three consecutive terms since the 1960s. Markets may be underweighting this historical pattern in favor of current data.
How to Position
If you're positioning around this race, here's what matters: For those betting on a Sherrill win at 88%, you're essentially saying early voting data is predictive and the Dem ground game delivers. You're getting 12 cents on the dollar for that conviction.
For contrarians eyeing Ciattarelli at 12%, you're betting on 2021 redux—GOP Election Day surge, polls underestimating Republican turnout, and suburban swing voters breaking late for the tax-cutting message. At 8:1 odds, that's an asymmetric upside play if you believe polls over market consensus.