Polymarket is investigating dozens of suspicious bets made on the Israeli election this week, a spokesman for the company said on Thursday, in what appeared to be the latest example of attempts to manipulate prediction markets.
The trades under investigation were placed by hundreds of new accounts, wagering that Prime Minister Benjamin Netanyahu and his Likud party would win the election. Those accounts placed their bets — on who would be prime minister and which party would win the most seats — just before polls closed in Israel on Tuesday.
A data analysis firm, Polysights, was among the first to flag the suspicious activity. “In the last 24 hours our tools picked up massive inflows of YES buys on fresh wallets,” the company posted on social media on Tuesday. “This is definitely worth investigating.”
Prediction markets like Polymarket and Kalshi allow people to wager on everything from foreign elections to who will get married on “Love Is Blind.” The companies have attracted billions of dollars in trades, but their popularity has raised concerns about whether they violate state gambling laws and are being manipulated by users with insider information.
In February, the Israeli authorities charged two people with using classified military information to place bets on Polymarket before the country attacked Iran. In April, three U.S. political candidates were found trying to bet on their own races. In August, Kalshi barred former Representative George Santos for making a bet about his attendance at President Trump’s State of the Union address six months earlier.
Polymarket said it had reported the Israeli activity to law enforcement. Bloomberg earlier reported that the company was investigating.
In the United States, concerns over insider trading and prediction market manipulation are rising before midterm elections on Tuesday. Senators Elizabeth Warren of Massachusetts, a Democrat, and John Curtis of Utah, a Republican, sent a letter to Polymarket and Kalshi on Wednesday demanding answers about how much manipulation could be happening on their platforms.
Polymarket announced a new election-specific surveillance effort on Tuesday “to detect potential attempts to manipulate election markets, distort probabilities or manufacture apparent market consensus.”
In the Israeli election, the surge of trades as voting ended on Tuesday quickly increased in value when exit polls showed that Mr. Netanyahu’s party was likely to win more seats than earlier reports had suggested. Though the race was still undecided on Thursday, some of the new accounts were able to sell their positions to other traders and make a profit.
One wallet reviewed by The New York Times created an account six minutes before placing a $14,000 bet on Tuesday — 12 minutes before the polls closed — and cashed out for $42,000 on Wednesday after the odds had risen. (It was unclear if that was an account that Polymarket was investigating.)
Separately on Thursday, Polymarket suspended trading for about an hour after some users said on social media that their accounts had been drained of funds. The company said DebugBear, a debugging tool used by Polymarket, was involved.
DebugBear said in a statement that it was affected by an ongoing security incident.
Polymarket posted on social media that the company would “make this right” and fully reimburse affected traders.
The post Polymarket Is Investigating Suspicious Bets on Israeli Election appeared first on New York Times.
