Class-Action Suit Targets Kalshi Over Khamenei Market Payouts

A class-action lawsuit filed Thursday in the U.S. District Court for the Central District of California accuses prediction market platform Kalshi of misleading traders and withholding millions in expected payouts on a contract tied to the departure of Iran's Supreme Leader, Ayatollah Ali Khamenei, who was killed in U.S.-Israeli strikes on February 28, 2026.

The suit, brought by traders Adam Risch and Yonatan Gliksman on behalf of a proposed class of U.S. participants, centers on Kalshi's "Khamenei out as Supreme Leader?" market, which asked users to predict whether Khamenei would leave office by March 1. Trading volume in the market surpassed $54 million amid heightened tensions in the Middle East, including a months-long U.S. military buildup and reports of an American naval presence near Iran. News outlets reported Khamenei's death that Saturday, alongside hundreds of other casualties from the strikes, which also claimed top Iranian officials.

Plaintiffs allege that the market's terms created clear expectations of full payouts—$1 per share—for "yes" contracts if Khamenei exited office for any reason, including death. They claim Kalshi applied a "death carveout" provision only...