Online Betting Platform Investigates Suspicious Israeli Election Wagers

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

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 after polls closed and exit polls indicated the Likud party would win more seats than predicted. Some new accounts reportedly sold their positions for profit before the final vote count was completed.

One digital wallet examined by The New York Times created an account six minutes before placing a $14,000 bet on Tuesday, 12 minutes before polls closed, and cashed out a $42,000 profit on Wednesday as odds shifted. It is unknown if this specific account is among those Polymarket is investigating.

Forecasting markets like Polymarket and Kalshi allow users to bet on various outcomes, but their popularity raises concerns about gambling law violations and insider trading. This is not the first time such markets have faced scrutiny. In February, Israeli authorities accused two individuals of using classified military information to bet on an Iran attack. In April, three U.S. political candidates were found to have bet on their own races. In August, Kalshi blocked former Congressman George Santos after he bet on his attendance at a presidential speech.

U.S. Senators Elizabeth Warren and John Curtis recently sent a letter to Polymarket and Kalshi demanding answers about potential market manipulation. Polymarket announced a dedicated oversight program for the U.S. midterm elections to identify attempts to sway election markets. On Thursday, Polymarket temporarily froze trading after some users reported their funds were withdrawn, an issue attributed to a security event involving a debugging tool. Polymarket stated it would resolve the matter and fully compensate affected traders, with no connection reported to the suspicious Israeli election bets.

Prior to the election, forecasting markets overwhelmingly predicted a change in government, with Polymarket giving Gadi Eisenkot a 56% chance of becoming prime minister compared to Netanyahu's 27.5%. Within hours, this advantage evaporated, and odds shifted sharply in favor of Netanyahu. The Israeli political market on Polymarket has attracted over $70 million to date.