The bettors did not receive their payout.
PublishedMarch 5, 2026 3:50 PM EST•UpdatedMarch 5, 2026 2:41 PM EST
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Bettors had wagered $54 million that Iran’s Ayatollah Ali Khamenei would be “out before April 1, 2026.” But as bettors planned to cash out last Saturday following his death due to a joint US-Israel operation, they learned that Kalshi froze the trade.
The bettors did not receive their payout.
According to The Washington Post, the prediction market tried justifying not paying its winner by saying the site doesn’t allow transactions “directly tied to death.”
The outlet interviewed an anonymous Israeli-American business executive in New York, who the app said won $63,000 on the bet, but wouldn’t let him withdraw.
“I was booking my trip to Courchevel,” he said jokingly to The Washington Post. “Then they changed the rules … and everybody got screwed.”
Iranian Supreme Leader Ali Khamenei speaks in Tehran, Iran on January 03, 2026. (Photo by IRANIAN LEADER PRESS OFFICE/Anadolu via Getty Images)
Kalshi argues that allowing death-related trades could create fatal incentives, such as a planned assassin for profit. However, former chief of staff at the Securities and Exchange Commission Amanda Fischer argued that death was implied as part of the trade.
“How is an 86-year-old theocratic leader supposed to lose his power other than through death?” Fischer told the outlet. “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.”
She did acknowledge, though, “There’s a reason we don’t let people take fire insurance policies out on [other people’s homes] — because it would incent arson.”
For what it’s worth, Kalshi could have added “by way other than death” to the trade. It did not, presumably because that language would have deterred users from betting.
Prediction markets are appealing but controversial. Brands like Kalshi and Polymarket operate like sportsbooks but allow users to gamble on elections, international affairs, and entertainment props. The rise of such apps has raised valid concerns from lawmakers about vague wording and insider trading.
Iranian Supreme Leader Ali Khamenei addresses the nation in a state television broadcast in Tehran, Iran on June 18, 2025. (Photo by Office of the Supreme Leader of Iran via Getty Images)
In January, an anonymous Polymarket trader won roughly $400,000 after successfully predicting, within a few hours, the timing of Venezuelan President Nicolás Maduro’s capture. The Defense Department said at the time that it prohibited personnel from using classified information for personal gain.
Polymarket also offers the controversial trade on whether Jesus Christ will return before 2027, for which it currently gives just a 4% chance.
Despite the backlash, Kalshi maintains that Khamenei’s death cost it more than the users it owed for winning the bet.
“Kalshi has sought to quiet the firestorm by reimbursing any bets, fees or losses from the trade, which Mansour said led the company to incur ‘a substantial loss to make users whole.’ A person familiar with Kalshi discussions, who spoke on the condition of anonymity to detail internal deliberations, said the payments have cost the company roughly $2.2 million,” The Washington Post reports.
