Traders bet Obama will win Democratic nomination

By David Alexander

WASHINGTON (Reuters) - Democratic presidential contender Hillary Clinton will win several state nominating contests in the coming months but has little chance of becoming the party's candidate for the November 2008 election, traders were betting on Tuesday.

Traders in the Dublin-based Intrade prediction market gave Democratic front-runner Barack Obama an 86 percent chance of being the Democratic presidential nominee, versus a 12.8 percent for Clinton, the New York senator and former first lady.

Results were similar on the Iowa Electronic Markets at the University of Iowa, with traders giving Obama an 82.9 percent chance of winning, versus a 12.8 percent chance for Clinton.

Intrade traders were betting the Democratic nominee would ultimately become president. They gave the Democrat a 59.1 percent chance of winning, versus a 48.8 percent chance for the Republican. Iowa traders gave the Democrat a 57.1 percent chance of winning, versus 46.3 percent for the Republican.

Prediction exchanges let traders buy and sell contracts on the likelihood of future events. Contracts are structured so the prices can be read as a percent likelihood of an event occurring. Studies of prediction markets have shown they have an accuracy comparable to that of public opinion polls.

Expectations that Illinois Sen. Obama would be the Democratic presidential nominee have strengthened from 75 percent a month ago.

During that time Obama, who would be the first black U.S. president, has weathered a political storm over controversial statements made by the pastor of his church and has delivered a well-received speech on race in America.

The strong view of Obama's ultimate success came despite expectations that Clinton would win several important state nominating contests in the coming months.