Kalshi faces a class-action lawsuit over disputed payments totaling approximately $54 million related to bets on the departure of Iranian Supreme Leader Ali Khamenei.
Summary
- Kalshi faces a $54 million class-action lawsuit over disputed Khamenei bets.
- Traders claim the platform retroactively excluded death-related outcomes.
- Kalshi maintains that the death exclusion existed since the launch of the market.
Users who bet Khamenei would leave office before March 1 say the prediction market platform retroactively applied a rule excluding death-based consequences after he died in weekend military strikes.
The company maintained its terms explicitly prohibiting death trading from the start of the market and reimbursed millions in fees and losses to affected traders.
The lawsuit filed in the U.S. District Court for the Central District of California accuses Kalshi of applying the exclusion only after the result materialized, calling the practice deceptive.
Khamenei died Saturday during joint U.S.-Israeli military operations that killed hundreds of people, including senior Iranian officials, after months of deploying U.S. forces in the region.
The platform continued to accept transactions as reports of deaths emerged
The complaint alleges that Kalshi allowed trade to continue even after news of Khamenei’s death began to circulate.
The plaintiffs argue that the original terms of the deal made it clear that his departure from office could result from any circumstance, making the payment terms straightforward.
Removal from power by the death of the 85-year-old leader was the most likely scenario given the military tension, according to the trial.
U.S. naval forces had been massing near Iran as armed conflict seemed increasingly inevitable. This created conditions in which Khamenei’s death became the realistic path to leaving office rather than resignation or other peaceful transitions.
Company says death exclusion existed from market launch
Kalshi representatives said the platform took all precautions to prevent trading on death outcomes when creating the marketplace.
The terms included explicit language prohibiting death-based resolution upfront rather than being added later, according to the company’s statement.
Prediction market platforms have grown significantly since the 2024 presidential election, when their probability calculations outperformed traditional polls in predicting Donald Trump’s victory.
These services allow users to purchase yes or no contracts on future events such as political developments, sports competitions and economic indicators.
