Kalshi faces a class-action lawsuit over disputed payments totaling approximately $54 million related to bets on Iranian Supreme Leader Ali Khamenei’s ouster from office.
Summary
- Kalshi faces a $54 million class-action lawsuit over disputed bets on Khamenei.
- Traders say the platform retroactively excluded outcomes based on death.
- Kalshi maintains that the death exclusion existed since the launch of the market.
Users who bet Khamenei would leave office before March 1 claim the prediction market platform retroactively applied a rule excluding outcomes based on death after he was killed in weekend military strikes.
The company maintained its terms explicitly prohibiting trading in death scenarios from the market’s inception and refunded 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 on Saturday during joint US-Israeli military operations that killed hundreds of people, including senior Iranian officials, following months of US forces being deployed to the region.
The platform continued to accept trades as reports of deaths emerged
He complaint alleges that Kalshi allowed the trade to continue even after information about Khamenei’s death began to circulate.
The plaintiffs argue that the original terms of the market clearly stated that their departure could be due to any circumstance, making payment terms simple.
Removing the 85-year-old leader from power through his death was the most likely scenario given the military tension, according to the lawsuit.
American naval forces had gathered near Iran as armed conflict seemed increasingly inevitable. This had created conditions in which Khamenei’s death became the realistic path to leaving office rather than resignation or other peaceful transitions.
The company claims that the death exclusion existed since the market launch
Kalshi representatives said that the platform took all precautions to avoid trading with death results when creating the market.
The terms included explicit language prohibiting death-based resolution from the beginning rather than being added later, according to the company’s statement.
Prediction market platforms have grown markedly 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 events, sports competitions, and economic indicators.
