Bettors wagered $54 million on Khamenei's death. Now they're not getting paid.

[Zorro]

Traders on the prediction-market site Kalshi assumed they had won a fortune by correctly betting on the Iranian leader’s demise. The ensuing scandal has thrown a spotlight on the “dystopian” rise of gambling on real-world events.

When he learned Saturday about the killing of Iran’s Ayatollah Ali Khamenei, the Israeli-American business executive in New York was excited to cash in.

On the prediction-market site Kalshi, the executive — who spoke on the condition of anonymity due to concern over what his friends would think — had placed two bets, totaling $3,460, that Khamenei would be “out as Supreme Leader” by March or April 1. His Kalshi app placed green check marks next to his bets, indicating he’d won payouts worth more than $63,000.

Minutes later, however, Kalshi froze the $54 million trade for everyone who bet on that scenario, saying the site doesn’t allow transactions “directly tied to death.” The change triggered an online uproar, as Kalshi users flooded social media to argue the site had unfairly robbed them of winning bets.

“I was booking my trip to Courchevel,” the French Alps ski resort, he said jokingly to The Washington Post. “Then they changed the rules … and everybody got screwed.”

The outrage has intensified scrutiny into the explosive rise of prediction markets, which run like traditional sportsbooks but allow people to gamble on elections, international affairs and real-world events.

https://wapo.st/4slNDyG