Kalshi founder Tarek Mansour says the company wants to give people what they want in ‘The Claman Countdown.’
Kalshi is charged with embezzling $54 million after traders accused the prediction market of using a “death carveout” clause to avoid paying out bets related to the assassination of Iran’s Supreme Leader, according to a Reuters report.
Kalshi was sued in federal court on Thursday over contracts that questioned whether Ayatollah Ali Khamenei would step down before March 1, 2026, according to the class action lawsuit.
Khamenei, 85, was killed on Saturday in US-Israeli strikes that left hundreds dead, including senior Iranian officials. The strikes took place under the ongoing Operation Epic Fury.
The lawsuit says customers have been attracted to what it calls the “Khamenei Market” because of the volatile political climate surrounding Iran’s leadership. It is alleged that after Khamenei’s assassination, Kalshi used a “death” arrangement to avoid paying clients what he owed.
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In this photo provided by the Office of the Supreme Leader of Iran, Iran’s Supreme Leader Ali Khamenei addresses the nation on state television on June 18, 2025 in Tehran, Iran. (Office of the Supreme Leader of Iran via Getty Images / Getty Images)
“With the U.S. military massed on Iran’s doorstep and an unforeseen but widely anticipated military conflict, consumers understand that the most likely — and in many cases the only logical — option is for the 85-year-old leader to ‘step down’ with his own death,” the lawsuit said.
“The defendants also understand this.”
The complaint says the language of the contract is “clear, unambiguous and ambiguous,” and accuses Kalshi of “deceptive” and “fraudulent” conduct.
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Kalshi’s billboard showing the chances of the 2024 presidential election at the Nasdaq MarketSite in New York, US, on Wednesday, Nov. 6, 2024. (Michael Nagle/Bloomberg via Getty Images/Getty Images)
The lawsuit was filed in the US District Court for the Central District of California.
The company’s CEO, Tarek Mansour, on Saturday defended the “death drawing,” saying he “keeps the rules simple.” He also said that Kalshi will return all the money from the Khamenei market.
Prediction markets have exploded in popularity since the 2024 US election, when their real-time odds proved more accurate than polls in predicting Donald Trump’s victory, according to Reuters.
Two Iranian-made aerial vehicles (UAVs) Shahed-136 are displayed in Azadi (Freedom) Square during a rally to celebrate the 44th anniversary of the victory of Iran’s 1979 Islamic Revolution, in Tehran, Iran, on February 11, 2023. (Morteza Nikoubazl/NurPhoto via Getty Images/Getty Images)
Platforms like Kalshi offer tradable yes-or-no contracts tied to real-world events from politics and sports to economics. Contracts usually cost between zero and 100 cents and pay out when a certain outcome is guaranteed.
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Kalshi did not immediately respond to FOX Business’ request for comment.
Reuters contributed to this report.
