(Office of the Iranian Supreme Leader/AP photo)

Kalshi, a betting company, is being sued for not paying out $54 million to users who predicted Iran’s supreme leader would be out of office by March 1, just days after he was killed.

A class action lawsuit was filed on Thursday that called Kalshi’s actions “deceptive” and “predatory.” Ayatollah Ali Khamenei, Iran’s ex-supreme leader, was killed, along with other high-ranking government officials in strikes this week launched by both the U.S. and Israel.

“With an American naval armada amassed on Iran’s doorstep and military conflict not merely foreseeable but widely anticipated, consumers understood that the most likely—and in many cases the only realistic—mechanism by which an 85-year-old autocratic leader would ‘leave office’ was through his death. Defendants understood this as well,” the lawsuit reads.

Kalshi CEO Tarek Mansour has defended his company’s decision, saying his company does not deal with markets “directly tied to death.”

“We don’t list markets directly tied to death,” the CEO wrote on Saturday 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.”

Reacting to news of the lawsuit, Mansour doubled down on his defense of refusing the payouts.

“We stand by principle and law: 1. Kalshi didn’t deviate from its market rules. They were clear that death did not resolve the market to ‘Yes,”” he wrote. “2. Kalshi’s rules prevented a ‘death market’, where traders directly profit from death. This is a good thing (+ we’re a US based market). 3. Kalshi made no money here, and even reimbursed all losses out of pocket. Not a single user walked away losing money from this market.”

We stand by principle and law:

1. Kalshi didn’t deviate from its market rules. They were clear that death did not resolve the market to “Yes”.

2. Kalshi’s rules prevented a ‘death market’, where traders directly profit from death. This is a good thing (+ we’re a US based… https://t.co/gXMeQECFLz

— Tarek Mansour (@mansourtarek_) March 6, 2026

Mansour has argued that there is a “death carveout” rule that has always been part of his company’s policy.

“While the rules were clear and we tried our best to highlight them, traders vocalized they were not prominent enough,” he said. “We heard you, and we decided to reimburse out of pocket for all fees and all net losses from trading in the market.”

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