Speculation surrounding the removal of Iran’s Supreme Leader Ayatollah Ali Khamenei attracted attention from prediction markets like Polymarket and Kalshi on Monday, prompting Democratic U.S. officials to call for a ban on betting on military actions that could benefit individuals with privileged information.
Khamenei was killed in Israeli airstrikes on Tehran, Iran’s capital, over the weekend. U.S. lawmakers and experts highlighted bets placed on his ousting both in January and just before the attacks, reigniting concerns about the legality and morality of such transactions, as well as the potential for insider trading.
According to a review by Reuters of Polymarket’s platform, approximately $529 million was wagered on contracts linked to the timing of the attacks, and an additional $150 million was bet on contracts related to Khamenei’s removal as supreme leader.
Analytics company Bubblemaps reported that six accounts profited $1.2 million from Polymarket bets made shortly before the weekend’s raids. Competitor Kalshi also hosted a market concerning the possibility of Khamenei being ousted.
“It’s unacceptable that this is permitted,” remarked Democratic Senator Chris Murphy on Sunday in response to Bubblemaps’ findings, alleging – without proof – that individuals close to President Donald Trump were profiting from the conflict. “I’m moving swiftly to introduce legislation to prohibit this practice.”
“The sole special interest influencing the decision-making of the Trump administration is the well-being of the American people,” stated Davis Ingle, a spokesperson for the White House, via email.
Another Democratic official, California Representative Mike Levin, raised concerns about a Polymarket bet placed shortly before the airstrikes in Iran.
“Prediction markets should not be used as a means to profit from foreknowledge of military actions. We require accountability, openness, and supervision,” he expressed.
In late February, Democratic senators voiced apprehensions that prediction markets breached U.S. regulations, creating incentives for instigating conflicts and revealing classified information, after an unidentified trader earned around $410,000 by betting on the removal of Venezuelan president Nicolas Maduro.
Polymarket did not promptly respond to requests for comments but has asserted that prediction markets leverage collective intelligence to generate precise, impartial forecasts.
Kalshi stated that it prohibits bets directly associated with fatalities. CEO Tarek Mansour clarified that the company did not profit from the Khamenei market and refunded fees to users. Kalshi is a regulated platform that prohibits insider trading.
And prediction markets, where people bet real money on real-world events are moving into the news itself. CNN and CNBC have struck deals with a company called Kalshi, bringing betting odds into their coverage of politics, the economy, and even war. Reporter Danny Funt explains why this alarms journalists and ethicists, the risks of conflicts of interest and insider trading, and what happens to public trust when news becomes something you can wager on.
Legal considerations
Prediction markets have surged in popularity since the 2024 U.S. election, where their live probabilities proved more accurate than traditional polling in forecasting Donald Trump’s win.
They provide tradable contracts for yes-or-no outcomes, enabling users to bet on various