Kalshi's Khamenei death bets spark $2.2 million payout mess
Kalshi, a prediction market platform, has denied massive payouts on bets about Iran's Supreme Leader Khamenei leaving office after his death in US and Israeli strikes.
Instead of paying out based on the final odds, Kalshi used a fine print rule saying deaths settle at the last traded price before news broke, leaving many users frustrated and empty-handed.
Bettors feel blindsided by the payout rule
Many users feel blindsided by the payout rule. One bettor put down $3,460 hoping for a $63,000 win but only got his money back at even odds.
After complaints that the "death clause" was hidden in website design, Kalshi paid out $2.2 million in settlements to calm things down.
Kalshi updates rules and legislation on the line
To avoid future drama, Kalshi is updating its rules: all person-based markets will clearly state that deaths settle at the last traded price.
The "next Supreme Leader" market already highlights this, with over $6 million traded so far.
Lawmakers are pursuing legislation to ban markets that profit from war or assassination, while the CFTC is drafting rules for 'event contracts' that could address such markets.