Likud Reaches 61% to Form Next Government Despite 22-Seat Polls

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Likud Hits 61% on Prediction Markets, but Israeli Polls Tell a Different Story

The Knesset dissolved on July 17, formally triggering the campaign for October 27 elections and ending a coalition term that lasted a full four years for the first time since 1988. In the final legislative sprint before dissolution, Netanyahu's government pushed through measures weakening the attorney general's authority, enshrining ultra-Orthodox military exemptions, and expanding executive control over media. The opposition called it a judicial coup. The coalition called it delivering on promises.

Against that backdrop, prediction markets repriced Likud's chances of winning the next Israeli legislative election from 51% to 61% in three days. Kalshi quotes the party at 60%; Polymarket at 62%. The cross-platform consensus removes any suspicion of a single-venue anomaly.

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Likud

Consensus YES price across 2 venues

40%average

PolymarketBest YES price41¢Kalshi43¢

National Unity

Consensus YES price across 1 venues

1%average

KalshiBest YES price2.8¢

Bennett 2026

Consensus YES price across 1 venues

1%average

KalshiBest YES price3.4¢

Yesh Atid

Consensus YES price across 1 venues

0%average

KalshiBest YES price0.5¢

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Here is the paradox: Likud is currently polling at just 22 projected Knesset seats, its lowest mark since August 2025, according to Israel National News. Former Prime Minister Naftali Bennett and centrist ex-military chief Gadi Eisenkot are both gaining in surveys. On a surface read, the polls and the market are moving in opposite directions. That gap is the story.

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What the Prediction Market Is Actually Pricing for Likud

The market question resolves on who wins the next Israeli legislative election. In Israel's proportional-representation system, "winning" means forming a governing coalition that commands at least 61 of 120 Knesset seats. It does not mean winning the most seats outright. This distinction is critical.

Likud at 22 seats is weak by its own standards. But the right-religious bloc functions as an ecosystem, not a single party. Ultra-Orthodox factions Shas and United Torah Judaism, plus Itamar Ben Gvir's Otzma Yehudit and Bezalel Smotrich's Religious Zionism, have historically delivered 15 to 25 additional seats. If those partners hold steady or gain from the controversial laws passed in the final session, the bloc could still cross the 61-seat threshold even with a diminished Likud.

Markets appear to be pricing exactly that arithmetic. A 10-percentage-point repricing in 72 hours suggests traders see the dissolution itself, and the legislative legacy it locked in, as structurally favorable for the incumbent coalition's ability to reconvene after October 27. The ultra-Orthodox exemption law, in particular, cements a core coalition commitment that keeps Haredi parties invested in returning to government with Netanyahu.

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The Catalysts Behind Likud's 10-Point Jump

The most obvious trigger is the Knesset's dissolution on July 17. Formal dissolution converted a speculative election timeline into a hard date, and traders historically reprice incumbency advantages once uncertainty about timing is removed. Netanyahu's coalition completed its full term, a feat of durability that gives the bloc a legislative record to campaign on.

The flurry of laws passed in the final days may also be reinforcing market confidence in coalition cohesion. By delivering on the ultra-Orthodox exemption, weakening the attorney general, and passing media-control provisions, Netanyahu gave every coalition partner a tangible win. That reduces the probability of defection during the campaign. Markets may be interpreting the legislative blitz not as desperation but as coalition maintenance executed at scale.

That said, no single confirmed event within the 72-hour window fully explains a 10-point swing. Some portion of the move may reflect repositioning by traders who waited for the dissolution vote to clear before entering. Without granular order-book data, we cannot confirm whether the repricing was driven by a few large positions or broad-based buying.

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The Case Against Likud: Why 61% Could Be Too High

Bennett is the most dangerous variable. Polls show him consolidating centrist and security-focused voters who backed Likud in 2022 but are disillusioned by the judicial overhaul and the ongoing wars in Gaza and Lebanon. His military credentials and prior prime ministerial experience give him crossover appeal that generic opposition figures lack. Eisenkot, a former IDF chief of staff, adds another credible security hawk competing for the same voter pool.

Internal Likud dynamics are a second risk. Netanyahu's demand for 10 reserved slots on the party list has sparked open dissent from Central Committee Chairman Haim Katz, who warned it could "crush" the party. Primaries are scheduled for no later than July 28, and the unresolved question of whether regular primaries will even occur introduces organizational risk at the worst possible moment.

There is also the incumbency trap. Netanyahu's coalition presided over the October 2023 Hamas attacks and the wars that followed, which have cost Israel international standing and triggered proceedings at international courts. Voters who blame the government for intelligence failures on October 7 are a structural ceiling on right-bloc support. If turnout surges among anti-government voters, coalition math could break down even if individual party polling remains stable.

A Bennett-led opposition bloc that unifies the center, pulls security voters from Likud, and benefits from anti-incumbency sentiment is a plausible path to 61 seats. The market's 39% implied probability for non-Likud outcomes reflects that possibility but may underweight it given the polling trajectory.

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Resolution Timeline and What to Watch

The market resolves on October 27, 2026, giving traders 98 days to adjust positions. Likud's primaries, expected by July 28, are the next inflection point. If Netanyahu secures his reserved slots without a damaging internal fight, expect the market to hold or drift higher. If the primaries produce a public fracture, 61% will look generous.

Coalition partner polling deserves more attention than Likud's own numbers. Watch Shas, United Torah Judaism, and the Religious Zionism parties. If their combined seat projections hold above 35, the right-religious bloc remains viable even with Likud at 22. If they slip below 30, the 61-seat coalition becomes arithmetically strained regardless of what Likud does on its own.

The market is making a structural bet: that coalition math, incumbency advantages, and Netanyahu's record of assembling governing majorities will override a weak headline polling number. It is a defensible thesis, but one that prices in very little room for opposition consolidation. At 61%, Likud's margin for error is thinner than the number suggests.