Polymarket, a leading prediction market platform, is investigating a series of suspicious bets placed on Israel’s recent election, company representatives confirmed Thursday. The trades, made through hundreds of newly created accounts, centered on wagers that Prime Minister Benjamin Netanyahu and his Likud party would secure victory. These bets occurred just prior to the closing of polling stations on Tuesday.
The unusual activity was first flagged by Polysights, a data analysis firm specializing in market behavior. Polysights reported a large volume of "YES" bets arriving from fresh wallets within a short timeframe, prompting concerns about the integrity of the market. Polymarket has since alerted law enforcement authorities and is conducting its own internal review.
Prediction markets, such as Polymarket and Kalshi, allow participants to place bets on a range of events, including elections and entertainment outcomes. While these platforms have attracted billions in trades, they face growing scrutiny over potential violations of gambling laws and the possibility of market manipulation by users with access to insider information.
In recent months, regulators have taken note of suspicious activity linked to these markets. Earlier this year, Israeli officials charged two individuals with using classified military intelligence to inform bets placed on Polymarket ahead of a reported attack on Iran. In the United States, several political candidates attempted to wager on their own campaigns, while Kalshi barred former Representative George Santos for a retrospective bet regarding attendance at a presidential event.
Ahead of the upcoming U.S. midterm elections, concerns over insider trading on prediction platforms have intensified. Senators Elizabeth Warren and John Curtis recently sent letters to Polymarket and Kalshi requesting detailed information on the extent and prevention of market manipulation on their sites. In response, Polymarket announced an enhanced surveillance initiative designed to detect and prevent attempts to distort election-related markets.
During the Israeli election, the surge in last-minute bets favoring Netanyahu and Likud corresponded with exit polls indicating a stronger-than-expected performance for the party. Some of the new accounts reportedly sold their positions to other traders for a profit as market odds shifted. For example, one account was created minutes before polls closed, placed a $14,000 bet, and cashed out the following day after odds improved for a $42,000 return. It remains unclear whether this specific account is part of the ongoing investigation.
Separately, Polymarket experienced a temporary suspension of trading on Thursday after users reported that funds had been unexpectedly withdrawn from their accounts. The company attributed the disruption to a security issue involving DebugBear, a third-party debugging tool. DebugBear confirmed it was managing an ongoing security incident. Polymarket stated it would fully reimburse affected traders and pledged to resolve the matter promptly.