Kalshi Refuses to Pay $54M in Winnings on Khamenei Trade

Prediction market platform faces user fury over decision not to honor bets on Iranian leader's death

Published on Mar. 5, 2026

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The prediction market platform Kalshi has drawn outrage from users for refusing to pay out winnings on a $54 million trade related to the death of Iranian Supreme Leader Ayatollah Ali Khamenei. Many bettors assumed they had won big on wagers that Khamenei would be "out as Supreme Leader" by Saturday after he was killed in joint US-Israeli air strikes, but Kalshi announced it would not be paying out any winnings on those wagers, citing guidelines that prohibit markets "directly tied to death."

Why it matters

This case highlights the ongoing debate around the ethics and regulation of prediction markets, which some critics argue can incentivize unethical behavior and insider trading. There are concerns that markets tied to events like government actions or deaths could lead to perverse incentives, such as encouraging violence or assassination attempts. Lawmakers are considering new legislation to restrict such markets.

The details

Kalshi, an American prediction market platform, promoted the Khamenei trade to bettors on its website and in push notifications ahead of the Supreme Leader's killing on Saturday. After his death, the platform alerted users that odds on the market had "surged to 68%," but then said it would not be paying out any winnings, citing its rules against markets "directly tied to death." Kalshi later said it would reimburse losses related to the trade, and its CEO argued the company designs its rules to "prevent people from profiting from death." However, users accused Kalshi of using vague language and changing the rules after the fact.

  • On Saturday morning, during the first day of strikes, Khamenei was killed in joint US-Israeli air strikes.
  • Earlier this week, prediction market rival Polymarket faced backlash from lawmakers over insider trading related to the strikes on Iran.

The players

Kalshi

An American prediction market platform that allows users to bet on politics, sports, foreign affairs and pop culture.

Ayatollah Ali Khamenei

The former Supreme Leader of Iran who was killed in joint US-Israeli air strikes.

Chris Murphy

A Democratic Senator from Connecticut who said he would draw up legislation to ban bets tied to government actions, arguing that prediction markets have created a more "dystopian world."

Tarek Mansour

The CEO of Kalshi, who argued that the Khamenei trade was "important" but that the company designs its rules to "prevent people from profiting from death."

Polymarket

A rival prediction market platform that operates offshore under different trade rules and did not freeze trades on its Khamenei market after the Supreme Leader's death.

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What’s next

Democratic Senator Chris Murphy said he would draw up legislation to ban bets tied to government actions, as critics have raised concerns that markets tied to death could incentivize assassinations and insider trading.

The takeaway

This case highlights the ongoing debate around the ethics and regulation of prediction markets, with concerns that they can create perverse incentives and lead to unethical behavior. It underscores the need for clear, transparent rules and oversight to ensure these platforms operate in a responsible manner and don't exploit users.