Israeli Election Betting Markets Saw Dramatic Overnight Shift

The Israeli political betting market experienced a dramatic overnight reversal as election results became known, with the "PolyMarket" platform seeing a significant shift in odds. Prior to the election, bettors favored Gadi Eisenkot to be the next prime minister with 56% odds, while Benjamin Netanyahu had only 27.5%. However, following the release of exit polls, Netanyahu's chances surged.

The total trading volume on the Israeli election market skyrocketed from $54.2 million the day before the vote to approximately $70.8 million overnight, reaching $73 million by morning. This volume makes it one of the largest political betting events outside the United States.

After the exit polls were published, Netanyahu's odds of continuing as prime minister jumped to 48%, while Eisenkot's fell to 33.5%. Naftali Bennett's odds dropped to 7% and Avigdor Lieberman's to 2.7%. The Likud party, which had only a 26% chance of being the largest party according to bettors before the election, is now priced at a 99% chance. The market also corrected its prediction for Likud's seat count, now estimating over 90% probability for 25 to 29 seats, a significant increase from the 20 to 24 seats predicted earlier.

Despite misjudging the largest party, the betting market accurately predicted the close race and high voter turnout. The market now estimates a 60% chance of a "stuck" parliament and only a 2% to 3% chance of any coalition achieving a majority. Netanyahu leads the market on who will receive the mandate to form the government with 59% of the odds, compared to 41% for Eisenkot. The high voter turnout, predicted by the market at 74% or higher, was realized with 77.7% of the vote, the highest since 1999.

Beyond the main election outcome, ancillary markets also saw substantial activity. Approximately $14 million was traded on which party would be the largest, $6 million on the Likud's seat count, and a separate market on when Netanyahu will finish his term accumulated $125 million, with a 41% chance of his term ending by June 2027. The main market will officially close only after the prime minister is appointed and takes office.