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News and Updates

Kalshi sued over $54M Iran leader bets after 'death carveout'

Kalshi, a U.S.-based prediction market platform, is facing a proposed class-action lawsuit filed on March 6, 2026, in the Central District of California, accusing the company of deceptive and predatory practices for refusing to pay out approximately $54 million in winnings to users who bet "Yes" on whether Iran's Supreme Leader Ayatollah Ali Khamenei would leave office before March 1, 2026. Traders heavily wagered on the outcome amid escalating U.S.-Iran tensions, interpreting the contract's clear language—covering departure "by any cause, including death"—as triggering a full payout after Khamenei was killed in U.S.-Israeli airstrikes on February 28, 2026. The suit claims Kalshi allowed and even encouraged continued betting while knowing a hidden or insufficiently prominent "death carveout" clause (intended to prevent markets from profiting directly from death under U.S. derivatives rules) would block resolutions to "Yes." In defense, CEO Tarek Mansour has maintained that the carveout has always been part of the rules to avoid death-tied markets, that Kalshi did not deviate from policy, and that the company made no profit from the event—in fact, it reimbursed all trading fees and net losses out-of-pocket so no user lost money. The dispute has ignited significant trader backlash and raised questions about transparency in prediction market rules for geopolitically sensitive events.