A class-action lawsuit has accused prediction market platform Kalshi of refusing to pay millions of dollars to bettors who predicted Iran’s supreme leader would leave office before a March deadline.
Lawsuit Alleges $54 Million In Unpaid Bets
The lawsuit, filed in the U.S. District Court for the Central District of California on Thursday, alleges that bettors are owed about $54 million arising from a prediction market on whether Ayatollah Ali Khamenei would leave office before March 1.
The market allowed users on Kalshi to trade “yes” or “no” contracts on the outcome.
Plaintiffs argue the contracts should have paid out after Khamenei was killed in U.S.-Israeli strikes, among other senior Iranian officials.
The complaint alleges Kalshi invoked a “death carveout” only after news of Khamenei’s death surfaced to avoid paying winning bettors.
According to the lawsuit, the contract language stated that the leader’s departure from office could occur for any reason, including death.
Kalshi Pushes Back
In a statement to Reuters, Kalshi denied the claims, saying the rules were always clear and included safeguards preventing trading based on death outcomes.
A company spokesperson also said the platform reimbursed all fees and net losses out of pocket to ensure no participant lost money in the disputed market.
Previously, Kalshi CEO Tarek Mansour responded to criticism on X, where some accused Kalshi of allowing bets on a person’s death. Mansour said the platform does not list markets directly tied to death.
Prediction markets have surged in popularity since the 2024 U.S. presidential election, when many platforms gained attention for forecasting outcomes in real time.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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