Study Finds Prediction Markets Manipulated in Israeli Election
Researchers claim large players are manipulating prediction markets to shape public perception of the Israeli election, contradicting traditional polling data.
Prediction markets including Polymarket and Kalshi strongly favor former Israel Defense Forces chief of staff Gadi Eisenkot to replace Benjamin Netanyahu as Israel's prime minister following Tuesday's election. Polymarket traders placed bets indicating a 58% probability of an Eisenkot victory, a sentiment that contrasts with recent polls showing a deadlock. Polling suggests neither candidate has a clear path to a 61-seat governing majority, with Eisenkot's change bloc at 52 to 56 seats and Netanyahu's coalition at approximately 50 seats.
A study by researchers from the University of Haifa, Columbia Law School, and Betting Intelligence suggests this market data is skewed. Analysis of 1.2 million transactions revealed that a small number of large accounts dominate the activity. Specifically, 18% of the money backing Netanyahu was concentrated in a single account, while 29% of bets against him were held by only seven accounts.
Professor Moran Ofir characterized the market as fragile and highly susceptible to manipulation. The researchers argue that powerful actors with vested interests are using these platforms to shape public perception rather than to maximize profit, undermining the platforms' intended purpose of aggregating the wisdom of the crowd.
