Kalshi CEO Defends Khamenei Market Rules After Backlash, Announces Full Fee Reimbursement
Kalshi CEO Tarek Mansour defended the platform’s handling of the controversial “Ali Khamenei out as Supreme Leader?” market after the Iranian Supreme Leader was killed in U.S.-Israeli strikes early Saturday, February 28, 2026. The contract — live since January 9 — generated over $50 million in total volume, including roughly $20 million on Saturday alone, before trading was halted at 2:59 PM ET and formally closed at 10:06 PM ET.
Under CFTC-filed rules, if Khamenei died, the market settled at the last-traded price before death (recorded at 1:14 AM ET) rather than resolving binary “Yes.” Mansour emphasized:
“We don’t list markets directly tied to death. When potential outcomes involve death, we design the rules to prevent people from profiting from death.”
Full Fee Reimbursement & Post-Death Refunds
Kalshi announced it is:
- Reimbursing all trading fees on the contract
- Settling pre-death positions at the last-traded price before death
- Fully refunding the cost of entry for any positions opened after Khamenei’s death
The platform issued two clarifications during the day, acknowledging prior settlement language was “grammatically ambiguous” between “prior to the death” (CFTC terms) and “prior to confirmed reporting of death” (market page).
Backlash Over Promotion and Perceived Inconsistency
Criticism centered on Kalshi’s promotion: after early reports of the death, Kalshi posted on X “BREAKING: The odds Ali Khamenei is out as Supreme Leader have surged to 68%” — a message Mansour reposted. Former SEC chief of staff Amanda Fischer (now at Better Markets) called it “more or less offering a proxy market on assassination.”
Additional backlash highlighted perceived inconsistency:
- Kalshi previously ran a “Who will be at Trump’s inauguration?” market including Jimmy Carter
- After Carter’s death in December 2024, the contract resolved “No” — effectively settling based on someone’s death
- Critics on X argued: “You settle on death, just not when it makes you money.”
Mansour defended the market’s purpose, citing geopolitical, economic, and national security implications of leadership changes — pointing to Venezuela’s recent transition as evidence autocrats can leave power without dying.
Rising Regulatory and Political Pressure
The controversy arrives amid intensified scrutiny of prediction markets:
- Six Democratic senators led by Adam Schiff sent a letter to CFTC Chairman Michael Selig (March 9, 2026 deadline) urging a ban on contracts that resolve on or correlate to an individual’s death
- Sen. Chris Murphy (D-CT) announced he is “working on legislation to ban corrupt and destabilizing prediction markets”
- The Coalition for Prediction Markets (including Kalshi) stated regulated platforms already prohibit contracts involving death
Kalshi has positioned itself as the compliance-forward alternative to Polymarket, which faces parallel criticism over geopolitical markets.
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