Prediction market platform Kalshi is facing a class-action lawsuit over disputed payouts worth about $54 million linked to bets on the future of Ali Khamenei.
The lawsuit was filed in the United States District Court for the Central District of California. Traders claim the platform refused to pay winning bets after Khamenei died in military strikes.
The prediction market allowed users to bet on whether Khamenei would leave office before March 1. When reports confirmed his death, many traders expected the contracts to resolve in their favor.
However, Kalshi said the market excluded outcomes involving death. The company argued that this rule existed from the start and prevented trading on death-related events.
Traders behind the lawsuit disagree. They claim the platform only applied the exclusion after the outcome became clear. The complaint describes the move as misleading and unfair to users who placed bets under the original terms.
The lawsuit also claims the platform continued accepting trades even as reports of Khamenei’s death began circulating online. Plaintiffs argue the market terms suggested that leaving office could happen under any circumstance.
Kalshi said it reimbursed millions of dollars in fees and losses to affected traders. The company maintains that the market rules always prohibited death-based resolutions.
Prediction markets like Kalshi have grown in popularity in recent years. Platforms allow users to trade contracts based on real-world events such as politics, economic data, and sports outcomes. The case could now test how these platforms handle controversial or unexpected results.
