DEATH CARVEOUT
https://theverge.com/kalshi-void-bets-khamenei-death
https://reuters.com/kalshi-sued-over-ouster-iran-leader-prediction-market
Kalshi sued over ouster of Iran leader prediction market
by Jasper Ward / March 6, 2026
“The Kalshi prediction market was sued for failing to pay $54 million to people who bet that Iranian Supreme Leader Ayatollah Ali Khamenei would leave office before March 1, according to a class-action lawsuit filed on Thursday. Khamenei was killed on Saturday in U.S-Israeli strikes that left hundreds dead, including top Iranian officials. The strikes followed a months-long U.S. military build-up in the region.
Kalshi did not invoke a “death carveout” provision until after the Iranian leader was killed to avoid paying customers in Kalshi’s “Khamenei Market” what they were owed, the lawsuit said. “With an American naval armada amassed on Iran’s doorstep and military conflict not merely foreseeable but widely anticipated, consumers understood that the most likely — and in many cases the only realistic — mechanism by which an 85-year-old autocratic leader would ‘leave office’ was through his death. Defendants understood this as well,” the lawsuit said.
The language specifying that Khamenei’s departure could be due to any cause, including death, was “clear, unambiguous and binary,” the lawsuit said, describing Kalshi’s actions as “deceptive” and “predatory.” The lawsuit, which was filed in the U.S. District Court for the Central District of California, said the company continued trading even as news of Khamenei’s death began to circulate. However, a Kalshi spokesperson said the company’s rules did not change and were clear from the start as it “included every precaution …. to make sure people could not trade on the outcome of death. We even reimbursed all fees and net losses out of pocket — to the tune of millions of dollars — to make sure not a single person lost money on this market,” the spokesperson said.
Prediction markets have exploded in popularity since the 2024 U.S. election, when their real-time probabilities proved more accurate than polling in forecasting Donald Trump’s victory. They offer tradable yes-or-no contracts that allow users to bet on a wide range of real-world events from sports to politics and the economy. Bet costs fluctuate between zero and 100 cents, and typically pay out when an outcome is confirmed.”
KHAMENEI MARKET RULES CLARIFICATION
https://independent.co.uk/polymarket-gambling-prediction-markets-iran-us-war
https://independent.co.uk/kalshi-bets-iran-ayatollah-ali-khamenei-death
Firestorm of controversy over bets placed on death of Iran’s Ayatollah Ali Khamenei
by Joe Sommerlad / 09 March 2026
“A popular predictions market app will not pay out the $54 million some of its users believed they were owed after correctly forecasting the death of Ayatollah Ali Khamenei, according to a report. Kalshi, which allows players to gamble on real-world events, offered customers favorable odds on Khamenei, 86, being “out as Supreme Leader” in response to the announcement of joint U.S.-Israeli airstrikes on Tehran in the early hours of Saturday morning. The company promoted the trade on its homepage and app and tweeted on Saturday: “BREAKING: The odds Ali Khamenei is out as Supreme Leader have surged to 68 percent.” It continued: “Reminder: Kalshi does not offer markets that settle on death. If Ali Khamenei dies, the market will resolve based on the last traded price prior to confirmed reporting of death.”
Khamenei was later confirmed dead in the airstrikes and the company clarified in a follow-up post: “Please note: A prior version of this clarification was grammatically ambiguous. “As a customer service measure, Kalshi will reimburse lost value due to trades made between these clarifications.” The company’s CEO, Tarek Mansour, offered a similar explanation on X (Twitter), pointing out that “event contracts” like these are not offered “directly tied to death,” arguing that by “out,” Kalshi had been referring to the possibility of Khamenei voluntarily stepping down or agreeing to a peaceful transition of power, not his being assassinated. He said he still believed the trade was “important because leadership changes in Iran have major impact on the world order,” including on oil and commodity prices and geopolitical relations. A Kalshi spokesperson has since told The Independent: “Kalshi doesn’t allow markets directly tied to death. We included every precaution on this market to make sure people could not trade on the outcome of death.
“Our rules were clear from the beginning, we never changed them, and we settled based on the rules. We even reimbursed all fees and net losses out of pocket – to the tune of millions of dollars – to make sure not a single person lost money on this market. “Kalshi is a peer-to-peer exchange and does not profit from user losses. We have no incentive not to pay out our users, but we need to follow the rules of the exchange and the rule of law. Profiting from death is not allowed on Kalshi, and that’s a good thing.” The company has nevertheless attracted a firestorm of complaints on social media. One Israeli-American business executive in New York told The Washington Post he had placed two bets on Khamenei being removed from power on either March 1 or April 1 worth $3,460 in total and subsequently believed he had won $63,000 when the ruler’s demise was announced later that day. “I was booking my trip to Courchevel,” he told the Post. “Then they changed the rules… and everybody got screwed.”
Amanda Fischer, a former chief of staff at the Securities and Exchange Commission who now works as a policy director at the financial advocacy group Better Markets, said she was not convinced by Mansour’s response and said the episode had exposed “just how problematic this business is. How is an 86-year-old theocratic leader supposed to lose his power other than through death?” she asked the Post. “All of the Kalshi users who placed bets on this believed they were voting on a death market, and many are very angry at how Kalshi broke the trades.” Connecticut Sen. Chris Murphy has since expressed his disapproval of such trades being offered in the first place, saying they were a sign of a “dystopian world. This is American commercial immorality on steroids,” he said. “Once events that involve good and evil simply become a financial product, I don’t know how right and wrong matters any longer… People shouldn’t be rooting for people to die because they placed a bet.”
Murphy added that he is drafting legislation to ban prediction market gambling related to government actions, warning that it could corrupt public decision-making. Donald Trump Jr., the president’s eldest son, joined Polymarket’s advisory board last August, a competitor to Kalshi. The betting analytics company Bubblemaps tweeted on Saturday that six suspected insider traders had made $1.2 million by correctly guessing that the U.S. would attack Iran on February 28, the date that Operation Epic Fury did indeed commence. Sen. Murphy responded to that post on Threads with the comment: “It’s insane this is legal. People around Trump are profiting off war and death. I’m introducing legislation ASAP to ban this.” The same accusations arose in January when an anonymous polymarket trader won $400,000 by correctly forecasting the capture of Venezuelan President Nicolas Maduro by U.S. Special Forces.”
PREDICTION MARKET INTERFERENCE
https://washingtonpost.com/israel-journalist-polymarket-iran-strike
https://gizmodo.com/polymarket-bettors-allegedly-send-israeli-reporter-death-threats
Bettors Allegedly Send Reporter Death Threats Demanding Changes to Article
by AJ Dellinger / March 16, 2026
“For years now, athletes and their families have reported receiving abuse and death threats from gamblers mad that their bet didn’t hit. Those attacks have now reportedly reached journalists. Emanuel Fabian, a military correspondent for The Times of Israel, writes that he has received threats from bettors demanding that he change the substance of his reporting to match what they need for a bet to cash out. Per Fabian’s account, the issue stems from a March 10 report that he wrote documenting that a missile from Iran hit an open area in Israel, causing no injuries. Inocuous (and, by all accounts, accurate) as that report is, it seemed to get several gamblers riled up. They started to contact Fabian, first asking—and then demanding—that he change his reporting, insisting that the missile didn’t hit Israel but was instead intercepted, and the fragments of that collision hit the open area.
Whether Iran struck Israel or not could matter for several reasons, particularly to government and military officials, but it seemed the people reaching out to Fabian were civilians. And while they presented themselves in some of their correspondence with Fabian as being concerned about accurate reporting, they were asking Fabian to retract a report that he knew to be true. So…why? Well, it seems at least some of them had taken a “No” position on a bet Polymarket bet that asked whether Iran would strike Israel on March 10—a “market” that had nearly $16 million tied up in it. Per the terms of the bet, “This market will resolve to ‘Yes’ if Iran initiates a drone, missile, or air strike on Israel’s soil on the listed date in Israel Time (GMT+2). Otherwise, this market will resolve to ‘No’.” There was one catch, though, that the people contacting Fabian seemed to know quite well. It stated that “Missiles or drones that are intercepted… will not be sufficient for a ‘Yes’ resolution, regardless of whether they land on Israeli territory or cause damage.” Hence, the refrain from people that Fabian update his reporting to say the missile was intercepted rather than a direct strike.
According to Fabian, the messages from apparent bettors came pouring in. First by email, then on Twitter, then to colleagues at other publications who were asked to contact Fabian and tell him to change the reporting. Then, he said, he started receiving direct threats through WhatsApp. “You have exactly half an hour to correct your attempt at influence,” a person wrote to him. “You have no idea how much you’ve put yourself at risk. Today is the most significant day of your career. You have two choices: either believe that we have the capabilities, and after you make us lose $900,000 we will invest no less than that to finish you. Or end this with money in your pocket, and also earn back the life you had until now.” That person apparently mentioned Fabian’s address and family members in that threat.
By all accounts, including apparently the Israeli military, it was a missile that struck Israel on March 10, so Fabian’s reporting is accurate. But the fact that these bettors believed that they could, through coercion and threats, convince him to change his reporting to suit their needs does reveal just how sketchy these markets are. There have been plenty of reports of insiders placing bets on Polymarket and Kalshi using information that isn’t publicly available. Now there’s the potential that a person in a position of authority—maybe a reporter, maybe a politician or government official, maybe a corporate spokesperson—lies or manipulates information to cash a bet in their favor or save themselves from harm. Maybe the “financialization of everything” is a horrible idea. Who coulda predicted that?”
NUCLEAR DETONATION MARKET
https://levernews.com/betting-on-armageddon
https://decrypt.co/polymarket-pulls-nuclear-detonation-market
Polymarket Pulls Nuclear Detonation Market Following Public Backlash
by Vismaya V / Mar 4, 2026
“Polymarket has pulled a controversial market that had asked traders to bet on whether a nuclear weapon would be detonated this year, after the contract drew widespread backlash across social media. The event, titled “Nuclear weapon detonation by…?” had attracted major trading activity on the prediction platform, with data visible on the site previously showing more than $838,000 in volume, with contracts tied to several timelines, including March 31, June 30, and before 2027.
Before archiving, Polymarket had posted a 22% probability of a nuclear weapon being detonated by year-end on X. “I think it’s pretty clear we shouldn’t have betting on nuclear weapons being used in a conflict,” Prediction market analyst Dustin Gouker told Decrypt. “Whatever small amount of utility we might get from learning the probability of that happening is offset by how terrible it is to let people speculate on that outcome,” he said. “You can also send false signals on this if the market is thinly traded. And obviously, people profiting from inside information is grotesque.” Decrypt has reached out to Polymarket for comment. Prediction markets such as Polymarket are facing mounting accusations that their war and conflict markets have become vehicles for insider trading, allegations now drawing the attention of U.S. lawmakers and international regulators alike. In the hours before the U.S. and Israel struck Iran, more than 150 accounts placed four-figure bets correctly predicting an American strike by the following day, a late surge totalling around $855,000, according to a New York Times analysis of Polymarket trading data. Meanwhile, a trader operating under the username “Magamyman” walked away with over $553,000 betting on the strike and the fate of Ayatollah Ali Khamenei.
Blockchain analytics firm Bubblemaps identified six suspected insiders who collectively netted $1.2 million on Polymarket in the hours before the conflict began, noting most of the accounts were relatively new and had traded specifically on a strike by Saturday. It is not the first time Polymarket has faced such accusations. In January, an anonymous trader made over $400,000 on suspiciously timed bets before Venezuelan President Nicolás Maduro’s arrest, while Israeli authorities last month charged two people for allegedly using classified military intelligence to place wagers during the country’s 12-day war with Iran.
Rival platform Kalshi has faced similar controversies after a market on the removal of Iranian leader Ayatollah Ali Khamenei drew more than $54 million in trades, with the exchange invoking a “death carveout” clause to settle positions at the last traded price rather than paying out in full after his death was confirmed. Gouker warned that markets tied to death and war could make it harder for prediction markets to gain mainstream credibility, adding that many people may ultimately see the system as “an endeavour to enrich insiders as a result.”
“The problem is there is no regulation of Polymarket International,” he said. “While Polymarket does have a regulated prediction market under the CFTC, that agency doesn’t have any direct say over what happens at the international site. And by allowing it to have a CFTC entity in the U.S., it seems to be tacit approval of the rest-of-world site,” the analyst added. The CFTC has submitted an advance notice of proposed rulemaking to the President’s budget office this week, the preliminary step that allows it to consult stakeholders before drafting formal rules. CFTC Chairman Michael Selig, who was sworn in just over two months ago, has made prediction market regulation an early priority, with a single federal standard across all 50 states as the stated goal.”
PREVIOUSLY
ELECTION BETTING
https://spectrevision.net/2024/10/27/election-betting/
VOLATILITY KINK
https://spectrevision.net/2020/10/29/election-kink/
EVENT DERIVATIVES
https://spectrevision.net/2015/07/31/decentralized-prediction-markets/
