Kalshi Faces Lawsuit Over Khamenei Prediction Market Rules

Class Action Targets Kalshi Prediction Market Policy

Prediction market platform Kalshi is facing a class action lawsuit over its handling of a market tied to the potential removal of Ali Khamenei as Iran’s Supreme Leader. Plaintiffs claim the platform failed to clearly disclose a “death carveout” policy that ultimately affected how the market was settled.

According to the filing, the carveout rule was not clearly included in the user-facing summary of the market’s rules. The lawsuit argues that the policy was presented in a way that would not adequately inform a reasonable user about its impact on potential outcomes.

Dispute Over Market Settlement and Refunds

After confirmation of Khamenei’s death, Kalshi voided the market rather than resolving it in favor of a “yes” outcome. The company maintains that it does not allow markets directly linked to death and structures rules to prevent profits from such events.

Kalshi co-founder Tarek Mansour said affected traders were reimbursed based on the last traded price before the event was confirmed, though plaintiffs argue the calculation method lacked transparency.

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