ELECTION BETTING SCANDAL: Hundreds of Suspicious Polymarket Accounts Cash In on Netanyahu’s Election Performance
Polymarket has launched an investigation into potentially suspicious betting activity surrounding Israel’s Knesset election after hundreds of newly established cryptocurrency accounts placed wagers favoring Prime Minister Binyamin Netanyahu and his Likud party shortly before voting ended Tuesday. Some of the traders subsequently collected combined profits exceeding $100,000, raising questions about whether they possessed advance knowledge of the election results.
According to a Bloomberg report published Thursday, an examination of blockchain transactions uncovered more than 600 digital wallets established on the same day that were used to wager on Netanyahu retaining the premiership or Likud finishing as the largest party in the Knesset.
The transactions attracted attention because they were made shortly before polling stations closed, when the eventual election outcome remained uncertain. Investigators are examining whether the unusual concentration of bets reflected access to information that had not yet been released to the public.
The value of the wagers increased sharply after Israeli television networks published their exit polls, which suggested that Likud had performed considerably better than some earlier projections indicated. Several of the accounts subsequently cashed out, generating more than $100,000 in combined profits, while other traders continued holding positions carrying significant potential gains.
Polymarket’s internal investigative team confirmed to Bloomberg that it was examining dozens of recently created wallets associated with the election wagers.
Independent blockchain analysis companies have also begun scrutinizing the activity. Polysights and Bubblemaps identified unusual transaction patterns, prompting separate investigations into the origins and timing of the bets.
Bubblemaps told Reuters that it had identified 101 Polymarket accounts that received their first funding on Election Day, before the polls had closed. A representative of the company said some of those accounts had already sold their positions for a profit after the exit poll results became public.
The suspicious transactions occurred during an election that left Israel’s political future unresolved, with neither Netanyahu’s right-wing and chareidi bloc nor the opposition securing enough Knesset seats to establish a government independently.
For several months before the vote, prediction markets had generally favored opposition leader Gadi Eisenkot over Netanyahu as the likely next prime minister. That assessment changed dramatically once the exit polls were released Tuesday night.
According to Bloomberg, Netanyahu’s implied probability of becoming prime minister climbed to 54%, while Eisenkot’s dropped to 23%, reflecting the sudden shift in expectations among traders.
Polymarket operates a prediction market in which participants purchase and sell contracts tied to the outcomes of elections, political developments, and other events. Its international platform uses cryptocurrency transactions recorded on a publicly accessible blockchain, allowing outside researchers to track wallet activity and examine patterns that may suggest coordinated trading.
The investigation is unfolding amid growing concerns that prediction markets could be exploited by individuals who possess sensitive government or military information before it becomes publicly known.
Earlier this year, Israeli prosecutors charged a military reservist and a civilian with allegedly using classified information about Israeli operations against Iran to make profitable wagers on Polymarket.
A separate American case involves a U.S. soldier accused of using confidential military information to place bets connected to an American operation in Venezuela. The soldier has pleaded not guilty.
Although the Israeli election wagers have drawn scrutiny because of their timing, concentration, and profitability, investigators have not determined that the traders relied on confidential information. Accurate political forecasts and independent analysis could also account for successful bets.
There is likewise no indication that the suspicious Polymarket transactions affected the actual Israeli election or involved interference with the counting of votes. The investigation is focused on whether traders improperly profited from information unavailable to the general public.
Bloomberg’s examination also identified one newly opened account that could earn approximately $180,000 if both its Netanyahu and Likud wagers prove successful. The account reportedly received nearly $40,000 from cryptocurrency wallets previously flagged for suspicious activity, including connections to sanctioned addresses.
The controversy has also attracted attention in Washington. On Thursday, Democratic Sen. Elizabeth Warren of Massachusetts and Republican Sen. John Curtis of Utah raised concerns about whether prediction-market operators have adequate safeguards against insider trading and manipulation.
“The identification of isolated instances of improper trading does not demonstrate that these markets are adequately protected,” the senators wrote. “Instead, it raises serious questions about how much similar activity may be going undetected.”
