Prediction Market Kalshi Faces Class Action Over Iran War-Linked Bets

Prediction market Kalshi is being sued in a proposed class action lawsuit filed in the U.S. District Court for the Central District of California, stemming from a dispute over payouts related to bets on whether Iranian leader Ali Khamenei would leave office. Traders claim Kalshi halted a $54 million market and refused payouts, citing a “death carveout” that wasn’t clearly disclosed initially. Plaintiffs, led by traders Adam Risch and Yonatan Gliksman, allege breach of contract and seek damages, restitution, and improved disclosure practices.

Kalshi CEO Tarek Mansour initially stated the platform doesn’t offer markets tied to a person’s death, but later announced the company would reimburse fees and net losses due to the lack of rule visibility. The company will also update its contract presentation to clearly show death-related exceptions. This lawsuit occurs alongside another legal challenge in Oregon, accusing Kalshi of operating an illegal gambling enterprise.

The controversy highlights increasing regulatory scrutiny of prediction markets in the U.S., with states debating whether they constitute gambling while the CFTC views them as derivatives. Kalshi continues to operate, currently listing odds on a potential U.S.-Iran nuclear agreement, estimating a 46% chance of a deal before 2027.

(Source：CoinGape)