The second reason that I don’t trust the neighbor method is that people just… aren’t good at knowing who a majority of their neighbors are voting for. In many cases it’s obvious (if over 70% of your neighbors support one candidate or the other, you’ll probably know). But if it’s 55-45, you probably don’t know which direction it’s 55-45 in.
My guess is that there’s some postprocessing here. E.g. if you assume that the “neighbor” estimate is wrong but without the refusal problem, and you have the same data from the previous election, then you could estimate the shift of opinions and apply that to other pools that ask about your vote. Or you could ask some additional question like “who did your neighbours vote for in the previous election” and compare that to the real data (ideally per county or so). I would be very surprised if they based the bets just on the raw results.
Oh yeah. How do I know I’m angry? My back is stiff and starts to hurt.