A popular predictions market app will not pay out the $54 million some of its users believed they were owed after correctly forecasting the death of Ayatollah Ali Khamenei, according to a report.
Kalshi, which allows players to gamble on real-world events, offered customers favorable odds on Khamenei, 86, being “out as Supreme Leader” in response to the announcement of joint U.S.-Israeli airstrikes on Tehran in the early hours of Saturday morning.
The company promoted the trade on its homepage and app and tweeted on Saturday: “BREAKING: The odds Ali Khamenei is out as Supreme Leader have surged to 68 percent.”
It continued: “Reminder: Kalshi does not offer markets that settle on death. If Ali Khamenei dies, the market will resolve based on the last traded price prior to confirmed reporting of death.”
Khamenei was later confirmed dead in the airstrikes and the company clarified in a follow-up post: “Please note: A prior version of this clarification was grammatically ambiguous.
“As a customer service measure, Kalshi will reimburse lost value due to trades made between these clarifications.”
The company’s CEO, Tarek Mansour, offered a similar explanation on X (Twitter), pointing out that “event contracts” like these are not offered “directly tied to death,” arguing that by “out,” Kalshi had been referring to the possibility of Khamenei voluntarily stepping down or agreeing to a peaceful transition of power, not his being assassinated.
He said he still believed the trade was “important because leadership changes in Iran have major impact on the world order,” including on oil and commodity prices and geopolitical relations.
A Kalshi spokesperson has since told The Independent: “Kalshi doesn’t allow markets directly tied to death. We included every precaution on this market to make sure people could not trade on the outcome of death.
“Our rules were clear from the beginning, we never changed them, and we settled based on the rules. We even reimbursed all fees and net losses out of pocket – to the tune of millions of dollars – to make sure not a single person lost money on this market.
“Kalshi is a peer-to-peer exchange and does not profit from user losses. We have no incentive not to pay out our users, but we need to follow the rules of the exchange and the rule of law. Profiting from death is not allowed on Kalshi, and that's a good thing.”
The company has nevertheless attracted a firestorm of complaints on social media.
One Israeli-American business executive in New York told The Washington Post he had placed two bets on Khamenei being removed from power on either March 1 or April 1 worth $3,460 in total and subsequently believed he had won $63,000 when the ruler’s demise was announced later that day.
“I was booking my trip to Courchevel,” he told the Post. “Then they changed the rules… and everybody got screwed.”
Amanda Fischer, a former chief of staff at the Securities and Exchange Commission who now works as a policy director at the financial advocacy group Better Markets, said she was not convinced by Mansour’s response and said the episode had exposed “just how problematic this business is.”
“How is an 86-year-old theocratic leader supposed to lose his power other than through death?” she asked the Post. “All of the Kalshi users who placed bets on this believed they were voting on a death market, and many are very angry at how Kalshi broke the trades.”
Connecticut Sen. Chris Murphy has since expressed his disapproval of such trades being offered in the first place, saying they were a sign of a “dystopian world.”
“This is American commercial immorality on steroids,” he said. “Once events that involve good and evil simply become a financial product, I don’t know how right and wrong matters any longer… People shouldn’t be rooting for people to die because they placed a bet.”
Murphy added that he is drafting legislation to ban prediction market gambling related to government actions, warning that it could corrupt public decision-making.
Donald Trump Jr., the president’s eldest son, joined Polymarket's advisory board last August, a competitor to Kalshi.
The betting analytics company Bubblemaps tweeted on Saturday that six suspected insider traders had made $1.2 million by correctly guessing that the U.S. would attack Iran on February 28, the date that Operation Epic Fury did indeed commence.
Sen. Murphy responded to that post on Threads with the comment: “It’s insane this is legal. People around Trump are profiting off war and death. I’m introducing legislation ASAP to ban this.”
The same accusations arose in January when an anonymous polymarket trader won $400,000 by correctly forecasting the capture of Venezuelan President Nicolas Maduro by U.S. Special Forces.
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