Kalshi and Polymarket put Eisenkot ahead as Israel faces coalition deadlock

Prediction-market traders put former military chief Gadi Eisenkot ahead of Benjamin Netanyahu to become Israel’s next prime minister, even as pre-election polling suggested neither camp had an assured route to a governing majority.

Before the vote, Kalshi gave Eisenkot a 52% implied chance of taking the premiership, compared with 28% for Netanyahu and 10% for Naftali Bennett. Polymarket priced Eisenkot at 58% and Netanyahu at 27%, with no other candidate above 15%.

Those prices were forecasts of who would ultimately lead a government, rather than measures of party support. Most polls in the preceding week put Eisenkot’s “change bloc” on 52 to 56 Knesset seats and Netanyahu’s coalition at about 50, both short of the 61 required for a majority.

Eisenkot, a former Israel Defense Forces chief of staff and a centrist candidate, had a newly formed Yashar party that overtook Netanyahu’s Likud and the Bennett-Yair Lapid opposition alliance Together in recent polls. Exit polls then indicated that Netanyahu’s coalition would be substantially smaller than the parties opposing it, though neither principal bloc was expected to reach 61 seats.

Israel’s proportional system leaves the premiership dependent on coalition negotiations rather than simply the largest party’s result. The 120-seat Knesset can also sustain a minority government with outside support. In 2021, Bennett became prime minister with seven seats despite Likud winning 30.

The market prices also came with a warning about concentrated trading on Polymarket. A study by Moran Ofir, Joshua Mitts and Dan Zimmermann examined 1.2 million transactions and found that one account accounted for 18% of money backing Netanyahu, while seven accounts held 29% of the money betting against him.

Ofir said the Israeli market was dominated by a small group of relatively large players rather than the “wisdom of the crowd,” and described it as “fragile and highly susceptible to manipulation.” The researchers viewed large Netanyahu wagers as possible signs of access to nonpublic information, while Ofir said some participants could be trying to influence public opinion rather than maximise profit.

As an example, two newly created accounts wagered $3,200 on Ofer Winter becoming prime minister while his party was polling near the electoral threshold. The bets briefly placed Winter above Avigdor Lieberman in the market’s candidate ranking; Ofir suspected they were intended to give a misleading impression of the party’s prospects.

The study’s concerns underline the distinction between a contract’s implied probability and a representative voter survey, particularly in an election where coalition arithmetic remains unresolved.

Once official results are presented to President Isaac Herzog, parties that clear the threshold will recommend a candidate to form a government. The candidate selected receives 28 days, with a possible 14-day extension, to assemble a coalition.