Online Betting Platform Investigates Suspicious Bets on Israeli Election Outcome

Polymarket, a global betting platform, is investigating dozens of suspicious wagers placed on the recent Israeli elections. The company reported the suspicious activity to law enforcement, according to a company spokesperson and Bloomberg. The New York Times reported that hundreds of newly created accounts placed bets on Prime Minister Benjamin Netanyahu and the Likud party winning, shortly before polls closed on election day.

These accounts reportedly placed their bets on who would become prime minister and which party would secure the most mandates. Data analysis firm Polysights was among the first to flag the unusual activity, noting "massive inflows of 'YES' purchases on new wallets" in the 24 hours prior to the election. The value of bets surged immediately after voting concluded, as exit polls indicated the Likud party would win more mandates than previously predicted.

Some new accounts managed to sell their positions to other traders for a profit before the final vote count was completed. One digital wallet, created just six minutes before placing a $14,000 bet on Tuesday, less than 12 minutes before polls closed, reportedly realized a $42,000 profit on Wednesday after odds increased. It remains unclear if this specific wallet is part of Polymarket's investigation.

Forecasting markets like Polymarket and Kalshi allow users to bet on various outcomes, from national elections to reality TV shows, handling billions in wagers. However, their popularity raises concerns about gambling law violations and potential manipulation by individuals with insider information. This is not the first time such issues have arisen; in February, Israeli authorities accused two individuals of using classified military information for bets on Polymarket concerning an attack in Iran. Previously, three U.S. political candidates were found to have attempted to bet on their own races, and former Congressman George Santos was blocked by Kalshi for betting on his own presence at a presidential address.

Amid growing concerns over insider trading and market manipulation in U.S. forecasting markets ahead of upcoming midterm elections, Senators Elizabeth Warren and John Curtis sent a letter to Polymarket and Kalshi demanding answers. Polymarket announced a dedicated oversight program for the midterms to identify potential attempts to skew election markets. Separately, Polymarket temporarily froze trading on Thursday due to a security incident involving its debugging tool, DebugBear, which experienced a persistent security event. Polymarket stated it would resolve the issue and fully compensate affected traders, but no connection was made between this incident and the suspicious bets on the Israeli election.

Prior to election day, Polymarket's prediction market showed a clear lead for Gadi Eisenkot, with a 56% chance of becoming prime minister compared to Netanyahu's 27.5%. However, this advantage vanished within hours, with the market shifting sharply in favor of the prime minister. The Israeli political market on the platform has attracted over $70 million to date.