TLDR
- Users on Kalshi and Polymarket placed bets on Iran’s Supreme Leader Ayatollah Khamenei losing power before he was killed in U.S. and Israeli strikes on Feb. 28, 2026.
- Crypto analytics firm Bubblemaps identified six suspected insiders who made $1.2 million on Polymarket betting on the Iran strike.
- Sen. Chris Murphy announced plans to introduce legislation to ban prediction markets, calling the bets illegal.
- Kalshi refunded $2.2 million in fees and net losses to users after confusion over how the market would be settled.
- The CFTC already bans contracts tied to terrorism, war, or assassination, but regulated prediction markets found a workaround by framing bets around leadership changes.
Prediction markets Kalshi and Polymarket are under fire after users placed bets on Iran’s Supreme Leader Ayatollah Ali Khamenei losing power, just before U.S. and Israeli strikes killed him on Feb. 28, 2026.
The bets were framed around whether Khamenei would be “out as Supreme Leader” by certain dates. Kalshi is a U.S.-regulated platform. Polymarket operates offshore and is not subject to the same rules.
Kalshi CEO Tarek Mansour promoted the Khamenei market on his personal X account. He later compared it to oil futures, saying it was different from betting directly on someone’s death.
Polymarket listed the market at the top of its website. It also offered users the option to bet on the date of a strike, with Feb. 28 listed as a choice — the exact date the operation took place.
Amanda Fischer, a former chief of staff at the Securities and Exchange Commission, said the markets amounted to “a proxy market on assassination.”
Suspected Insider Trading
Crypto analytics firm Bubblemaps said it found six suspected insiders who made a combined $1.2 million on Polymarket by betting on a U.S. strike. Most of them bet on Feb. 28 as the strike date. One user turned a $26,000 bet into over $200,000, a return of more than 657%.
On Polymarket, Khamenei’s odds of losing power sat below 25% for most of the year. Around midnight before the strike, those odds jumped sharply, rising above 50% within hours.
Sen. Chris Murphy posted on X that the bets were “insane” and said he planned to introduce legislation to ban prediction markets. He accused people close to President Trump of “profiting off war and death.”
Lawmakers and Regulators Take Notice
A group of senators, including Sen. Adam Schiff, had already urged the Commodity Futures Trading Commission to ban contracts tied to an individual’s death. The CFTC already prohibits contracts involving terrorism, war, or assassination, but had not acted on the Khamenei markets before the strike.
After Khamenei’s death was confirmed, users flooded Kalshi’s comment section demanding payouts. Kalshi paused the market and later announced it would pay out based on the last traded price before his death.
Kalshi defined the moment of death as one minute before the military operation began. That decision angered many users who felt they had won their bets but were not fully paid.
Mansour announced Kalshi would refund all fees and cover net losses. The reimbursements totaled $2.2 million. The CFTC did not respond to requests for comment on the matter.
