After U.S. and Israeli strikes killed Iran’s Supreme Leader, Ayatollah Ali Khamenei, hundreds of millions of dollars poured into prediction markets as people bet on what would happen next.
According to Reuters, about $529 million was traded on Polymarket over when the U.S. and Israel would strike Iran, and $150 million was wagered on whether Khamenei would be removed by the end of March. Six newly created accounts reportedly made $1.2 million betting the attack would occur on Feb. 28 — the day it happened — raising concerns about possible insider knowledge.
Kalshi also saw tens of millions in bets on regime change in Iran.
Lawmakers are now pushing back. Senator Chris Murphy called it “insane this is legal” and plans legislation to ban such betting. Representative Mike Levin warned prediction markets must not become tools for profiting off advance knowledge of military action.
Kalshi CEO Tarek Mansour defended his company, saying it bars contracts directly tied to death and adjusted payouts related to Khamenei’s killing. Polymarket has not publicly commented.
The controversy highlights the legal gray area surrounding online prediction markets — and growing concerns about ethics and insider trading during wartime.