Betting platform Kalshi sued over $54 million Khamenei death bets
Kalshi, a popular prediction market platform, is being sued in California after refusing to pay out $54 million on bets about whether Iran's Supreme Leader Ayatollah Ali Khamenei would be ousted before March 1, 2026.
The company used a death carve-out clause to deny the payout when Khamenei was reported to have died during military strikes, even though many bettors had predicted his death as the likely outcome.
Kalshi to update markets on death bets
To address complaints, Kalshi paid $2.2 million based on last traded prices right before the strikes that reportedly killed Khamenei and refunded related fees.
Kalshi said the change was intended to minimize market disruption, minimize perverse incentives, and protect the markets.
Now, Kalshi plans to update all its markets so that if someone dies, payouts are paid at the odds that existed just before the person died, or at the odds prevailing when their death was reasonably anticipated by market participants, hoping this avoids future confusion.
Meanwhile, lawmakers such as Sen. Chris Murphy are considering rules that could ban betting markets tied to war or deaths altogether.