Kalshi faces a class-action lawsuit over disputed payments of nearly $54 million related to bets on Iran’s Supreme Leader Ali Khamenei’s ouster.
Conclusion
- Kalshi faces a $54 million class action lawsuit over controversial Khamenei bets.
- Traders say the platform has retroactively excluded death results.
- Kalshi believes that the death exception has existed since the beginning of the market.
Users who had bet on Khamenei to exit by March 1 claim the market prediction platform used a rule excluding fatal outcomes after he was killed in military strikes over the weekend.
The company has maintained its terms of banning trading in the doomsday scenario since the launch of the market, and has paid 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 using the exception only after the results have been obtained, calling it a deceptive practice.
Khamenei died on Saturday during a joint US-Israeli military operation that killed hundreds of people, including high-ranking Iranian officials, following the deployment of American forces in the region for several months.
The platform continued to accept trades as reports of deaths emerged
The complaint alleges that Kalshi allowed the business to continue even after news of Khamenei’s death was released.
Plaintiffs argue that the original terms of the market clearly stated that his departure from his office could occur at any time and ease the terms of payment.
The 85-year-old leader’s removal from power by death was the most likely scenario given the military tensions, according to the lawsuit.
US naval forces were gathering near Iran, while armed conflict seemed more and more inevitable. This created the conditions for Khamenei’s death to become the real way for him to step down instead of resigning or another peaceful transition.
The company claims that the death exception has been in place since the launch of the market
Kalshi’s representatives said that the platform takes all measures to avoid dead trades during market formation.
According to the company’s statement, these terms contain clear language that prohibits death settlements from the outset, rather than being added later.
Prediction market platforms have grown significantly since the 2024 presidential election, when their probability estimates outperformed traditional polls in predicting Donald Trump’s victory.
These services allow users to buy yes or no contracts on future events such as political developments, sporting events and economic indicators.
