Controversy Erupts Over Kalshi's Betting Rules Following Khamenei's Death
Kalshi Users React to Betting Controversy
Following the death of Ayatollah Ali Khamenei due to coordinated airstrikes by the US and Israel, many users on the prediction market platform Kalshi believed they had won substantial payouts. They had placed bets on whether Khamenei would be removed from his position as Supreme Leader by a specified date. However, Kalshi announced that it would not honor these bets, citing a policy that prohibits payouts on markets directly related to death. The total value of the affected trades is approximately $54 million, leading to significant backlash from users.
One frustrated user expressed their anger on social media, stating, "Literally go f–k yourselves. This is RIDICULOUS," and shared a screenshot of a $72.90 bet that should have yielded $936 but instead returned only $18.72. The reactions from users have ranged from outrage to dark humor. A New York-based Israeli-American executive had placed bets totaling $3,460, anticipating Khamenei's removal by early April, with potential winnings exceeding $63,000. After the market was frozen, he lamented, "I was booking my trip to Courchevel," referring to a luxury ski destination in the French Alps.
Kalshi's Justification and User Discontent
Kalshi's Defence and Why Users Aren't Buying It
Kalshi's CEO, Tarek Mansour, defended the platform's stance in a social media post, asserting that the rules had always been transparent and unchanged. He explained that the market was framed around Khamenei being "out as Supreme Leader," which could theoretically include a voluntary resignation rather than death. Mansour cited Venezuela as an example where a leader stepped down without passing away.
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However, users were not convinced by this analogy. One user remarked, "Using the Venezuela example is insane considering that's only ever happened once," while another commented, "Ahh yes because a dictator was going to willingly just 'step down.'" Many argued that the rules were ambiguous regarding death and criticized the lack of clear warnings against betting on a leader's demise. Kalshi later acknowledged that an earlier tweet about the market was "grammatically ambiguous" and added warning boxes to relevant markets regarding the death clause.
Kalshi also confirmed it had paid $2.2 million to cover fees and losses related to the market, stating that traders who placed bets after Khamenei's death would receive full refunds, while those who bet beforehand would be compensated at the last traded price before his passing.
Accusations of Hypocrisy
The Hypocrisy Accusations
Some users accused Kalshi of inconsistently applying its death policy. They referenced a previous market regarding whether the late former President Jimmy Carter would attend Donald Trump's inauguration, noting that Carter had died before the event, yet Kalshi paid out "No" bets without invoking the death clause. One user pointedly remarked, "You knew people were betting the 99-year-old would die before the event. This has nothing to do with death. This has everything to do with your bottom line." Kalshi denied any intention to create confusion with the market title.