Online betting: Lawsuit against Kalshi after bet on Chamenei's death

A class-action lawsuit has been filed against the online betting exchange Kalshi in the USA because it has not paid out a total of 54 million US dollars in winnings for a bet related to the death of Ali Khamenei. This was reported by the news agency Reuters. The bet was about whether the former Supreme Leader of Iran would leave his office before March 1st. Khamenei was killed on February 28th in US and Israeli airstrikes on Iran. Nevertheless, Kalshi did not pay out the money because this type of departure from office was not covered by the terms of the bet. The plaintiffs do not want to accept this and are therefore demanding their money.

Do not bet on a death

Tarek Mansour, a co-founder and CEO of Kalshi, stated after the news of Khamenei's death became known that no bets directly tied to a death would be accepted on the platform. He also stated that the rules would be interpreted in such a way that no one could profit from someone else's death: “That is what we did here.” However, Mansour admitted that this exception could be made more visible and that they would work on it. He also assured that all stakes would be refunded, depending on when exactly the respective bet was placed. However, this did not manage to quell the massive criticism under the post on the microblogging service X.

In the lawsuit, Kalshi is accused of having stated in the bet that it was “clear, unambiguous, and binary” that it was won if Khamenei left office by the specified date, Reuters quotes. Because an armada of warships had already positioned itself around Iran before the US attack and a military conflict had already become apparent, the most likely “mechanism” through which the Supreme Leader would lose his office was his death. Kalshi also knew this. The betting exchange's actions were misleading and harmful, the news agency further quotes. The lawsuit was reportedly filed in California.

The allegations point to another problem with online betting portals, which have become enormously popular in the USA recently. They have been the focus of public attention in recent weeks, mainly due to repeated indications of the use of insider knowledge. In mid-February, two people were even charged in Israel who are said to have placed bets on Polymarket based on internal military information about the occurrence of certain events. Users can also bet on the occurrence of a wide variety of events there. At the beginning of the year, an account earned 400,000 US dollars on the platform by correctly predicting that Venezuelan President Nicolás Maduro would not remain in office for much longer.

(mho)