Key highlights
Kalshi CEO Tarek Mansour defended the platform’s “death carve‑out” for its “Ali Khamenei out as Supreme Leader?” market, which settled at the last-traded price before Khamenei’s death was confirmed.
The market, which saw over $50 million in volume, sparked user outrage after Khamenei’s death in U.S.‑Israeli strikes, with accusations of unfair rules and with some users accusing Kalshi of proxy betting on assassination.
Kalshi is reimbursing fees, refunding trades entered after the death-trigger condition, and paying pre-trigger positions at the final pre-confirmation price (1:14 AM ET).
Kalshi CEO Tarek Mansour pushed back against user backlash over how the regulated prediction market handled its “Ali Khamenei out as Supreme Leader?” contract after Iran’s Supreme Leader died in U.S.‑Israeli strikes. In a series of X posts, Mansour explained that Kalshi explicitly bans markets that settle directly on someone’s death and designs “carve‑outs” to prevent profiting from it.
The Khamenei market, which accumulated over $50 million in volume (according to Bloomberg data), settled at the last traded price (1:14 AM ET) before his death was confirmed, with refunds for later purchases and full fee reimbursements.
What Happened with the Khamenei Market
Kalshi’s contract asked whether Khamenei would be “out” as Supreme Leader within a given timeframe, a question Mansour argued had major geopolitical and economic implications beyond mere death, such as regime change or coups, citing Venezuela as a recent example.
The rules clearly stated: “If Ali Khamenei leaves solely because they have died, the associated market will resolve […] based upon the last traded price prior to the death.” Despite this, traders who bought “yes” shares after early death reports but before official confirmation saw limited payouts, prompting accusations that Kalshi ran a de facto assassination market while dodging responsibility. Kalshi even promoted the surging odds on X (to 68%) during the strikes, which drew further criticism from users and figures like former SEC staffer Amanda Fischer.
CEO’s Defense and User Pushback
“We don’t list markets directly tied to death,” Mansour wrote on X. “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.” The company is refunding all trading fees, reimbursing users who entered post‑death at higher prices, and paying everyone based on the pre‑death price.
Mansour acknowledged some disagreement over the “death carve‑out” and said Kalshi would improve how such rules are displayed in the UI. However, users pushed back hard, calling the settlement unfair, accusing Kalshi of deleting critical replies, and threatening to switch to less-regulated rivals like Polymarket.
Why This Sparks Bigger Questions
The controversy highlights tensions in U.S.‑regulated prediction markets as they tackle sensitive events. Six Democratic senators have called on the CFTC to ban contracts tied to individual deaths, while critics argue Kalshi’s rules create loopholes for proxy betting on mortality.
Mansour defended the market’s value in pricing geopolitical risks such as oil shocks or regime stability, but the backlash underscores how “no death” policies can still feel like a raw deal to traders expecting straightforward resolutions. Kalshi’s more conservative approach contrasts with Polymarket’s $200+ million in Iran‑related volume, raising questions about regulation versus user freedom.
