$54M Bet on Ayatollah’s Death Lands Kalshi in Legal Trouble

Kalshi, a popular market prediction app, is facing controversy after refusing to pay a $54 million payout to users who correctly predicted that Iran’s Supreme Leader Ayatollah Ali Khamenei would leave office before March 1. A class-action lawsuit has been filed against the platform.

According to a class-action lawsuit filed on March 5, Kalshi was sued for refusing to pay $54 million to users who bet that Iran’s Supreme Leader Ayatollah Ali Khamenei would leave office before March 1.

Kalshi is a market prediction platform that allows users to place bets on real-world events. The platform lets users trade on outcomes related to sports, economics, politics. It operates similarly to a stock exchange, but focuses on binary (yes or no) event contracts.

Kalshi offered users favorable odds on Khameni, 86, “being out as supreme leader" after reports that Israel and the U.S. had launched airstrikes on Iran in the early hours of February 28. The company promoted the trade on its website and mobile app and posted on X, “BREAKING: The odds Ali Khameni is out as a supreme leader surged to 68 percent.”

The post continued, “Reminder: Kalsi does not offer markets that settle on deaths. If Ali Khamenei dies, the market will resolve based on the last traded price before confirmed reporting of death.”

Khamenei was reportedly killed on February 28 in a U.S.-Israel airstrike along with several other top senior officials of Iran. After the news of Khameni's death, the company clarified in another tweet on the social media page, mentioning, “ 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. He mentioned that “event contracts” like these are not offered “directly tied to death,” arguing that by “out” Kalshi had been referring to the possibility of Khameni voluntarily stepping down or agreeing to a peaceful transition of power, not him being assassinated. Mansour said he believed that the trade was “important because leadership changes in Iran have a major impact on the world order,” including on oil commodity prices and geopolitical relations.

A Kalshi spokesperson 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.”

The spokesperson added, “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 a million dollars, to make sure not a single person lost money on this market."

Despite the explanation, the company has faced widespread criticism on social media. The class-action lawsuit was filed in the United States District Court for the Central District of California.