Election milestone ! [UPDATED]

According to Intrade’s prediction market, the GOP is now predicted to wrest control of the Senate from the Democrats next month. Real people are betting real money that the Senate will change hands, with the contract for the Dems to retain control dipping below 50 for the first time (price is equivalent to percentage probability the event happens).

It is old news that the House will change hands – that contract has been in the GOP’s favor since the end of June.

For those of you new to prediction markets like Intrade and the Iowa Electronic Markets, studies have shown that they are very good predictors of elections, with an error that is comparable to or a little better than good polls, about 1.2% for Presidential elections.

UPDATE: The Senate contract shifted nearly 3 points during the day in the GOP’s favor. Dems are currently at 47% probability to retain control.

UPDATE 2: Down to 45% probability Dems retain the Senate.

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