Amid the growing crisis of a widening Middle East war, Kalshi Co-founder and CEO Tarek Mansour has clearly asserted that his pathfinder prediction market will no longer take contracts, or bets, on the timing of politically-motivated deaths, assassinations, sequestrations and extra-judicial killings.
Writing on social media site X, and referring to the March 1 killing of Iranian Supreme Leader Ayatollah Ali Khamenei in a joint Israeli-U.S air strike, Mansour affirmed:
“We don’t list markets directly tied to death.
“When there are markets where potential outcomes involve death, we design the rules to prevent people from profiting from death. That is what we did here.”
Nevertheless, the Kalshi Exchange is now embroiled in yet another storm of lawsuits – and allegations over alleged insider trading that has been roiling the world of prediction markets in recent months.
Assassination
New York-headquartered Kalshi took a flurry of contracts predicting the overthrow of Iran’s religious government only days–and in some cases hours–before Israeli jets struck Khamenei’s compound in the capital, Tehran, assassinating the ayatollah and wiping out most of the country’s top-tier leadership.
But Kalshi–unlike its rival Polymarket–is refusing to pay out, saying that it took the gaming action based on the premise of the timing of the “fall of the Iranian government” – and not “the death” of its political leaders.
“I know some of you disagree and prefer that we list these markets without a death carveout because it keeps the rules simple and because many traditional markets, like oil futures, can be proxy markets for war and death,” Mansour explained in his post on X.
“But we believe that’s different than having a market directly settling on someone’s death, which is not allowed for U.S.-regulated entities.”
Lawsuit
But now disgruntled punters, according to some reports, are seriously considering a class action lawsuit to get their “winnings”.
There are no such qualms at Kalshi’s leading prediction market rival, Polymarket.
Also Manhattan-based, Polymarket has been at the centre of a series of insider trading scandals that have implicated Trump administration officials and Israeli’s Shin Bet secret service.
As previously reported in iGamingFuture, suspicious trades were placed with Polymarket first on the timing of the so-called Twelve Day War against Iran by the U.S. and Israel last June, and then on the “fall” of Venezuela’s government, led by Chávista strongman Nicolás Maduro, who was kidnapped by U.S. Special Forces on January 3.
Latest Insider Trade
In the first suspicious insider trade, a gambler–presumed to be a member of Shin Bet–reportedly made over US$100,000 (£73,155) in profit on waging that Israel would attack Iran before the end of June, 2025, and that they would launch their strikes on the Muslim holy day of a Friday, called Jum’ah.
The alleged insider trading by Trump administration officials on the timing of Maduro’s defenestration netted the miscreants some US$400,000 (£300,114) on their Polymarket placement.
And yesterday, according to a separate special investigation by paper-of-record The Financial Times, there was yet more insider scandal to add to the Polymarket pyre.
The U.S. and Israeli attack on Iran was “preceded by a number of unusually large and well-timed bets that made a combined profit of US$330,000 [£247,629] and were placed by 12 suspicious accounts in the days before Saturday morning’s air strikes”, wrote the FT.
Morally Repugnant
Around half of the bets were made by new accounts that came in the six-hours before the strike.
“If a new wallet makes a very large bet on a single issue, you have to wonder why they’re doing that,” Matt Saincome, Chief Executive of financial data provider Unusual Whales, told the newspaper.
“We do see people [who] do that who are wrong.
“But it makes you think, perhaps that’s an insider.”
Meanwhile, six U.S. senators have written to the Commodity Futures Trading Commission (CFTC), who regulate prediction markets, and urged them to crack down on insider trading – and ban prediction contracts tied to death, war, terrorism or assassination, as ethically and morally repugnant.
Senators Adam Schiff, Catherine Cortez Masto, Richard Blumenthal, Cory Booker, Tim Kaine and Jacky Rosen affirm that federal regulations already bar contracts that involve, relate to or reference war, terrorism or assassination.
But in war, as history has taught us, truth is always the first casualty.
Watch this space!
