Getting heated
Kalshi CEO denies it offers ‘death markets’
Morality of prediction markets further called into question over Iran contracts.
In +More: Austria charges Novomatic owner.
UKGC signals openness to regulated crypto payments.
Greece: Regulator unveils new anti-black market measures.
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Contract killing
Things get real: When Iran’s Supreme Leader Ali Khamenei was killed in US-Israeli strikes on Saturday, CFTC-regulated prediction market Kalshi found itself at the center of a controversy over what constitutes markets that should or should not be offered on mortality grounds.
On the outs: The platform’s ‘Ali Khamenei out as Supreme Leader?’ contract, which had accumulated more than $50m in total trading volume, was suddenly no longer a hypothetical exercise in geopolitical forecasting.
Instead, it was a market that had to settle in the wake of a real death.
And it was the manner of that settlement that drew sharp criticism from regulators, financial policy advocates and traders alike.
Grim reapings: Kalshi CEO Tarek Mansour moved quickly to address the fallout in a post on X. “We don’t list markets directly tied to death,” Mansour wrote. “When there are markets where potential outcomes involve death, we design the rules to prevent people from profiting from death. That is what we did here.”
Mansour acknowledged that some traders would have preferred the platform to list the market “without a death carveout.”
Traders drew parallels with traditional markets, such as oil futures, that can serve as proxies for conflict.
But Kalshi’s position, Mansour argued, is that having a market settle directly on someone’s death is fundamentally different and “not allowed for US regulated entities.”
Geopolitical correctness: Mansour defended the market’s existence, arguing that a leadership change in Iran carries major geopolitical, economic and national security implications, and that it is always possible for an autocratic leader to step down or transition power without dying.
He pointed to Venezuela’s recent power transition as an example.
However, that example is also contentious given the circumstances around President Maduro’s capture.
Let’s settle this: The Kalshi CEO said the platform would reimburse all fees from the market. Traders who held positions before Khamenei’s death would be paid out at the last-traded price recorded on Saturday, while those who entered positions after his death would receive full refunds of their cost of entry.
The settlement, however, did not go smoothly. Kalshi halted trading at approximately 2:59 PM ET and formally closed the contracts at 10:06 PM ET.
The platform issued two clarifications during the day, conceding that earlier settlement language had been “grammatically ambiguous.”
The key issue was a discrepancy between the CFTC-filed contract terms, which referenced the last traded price “prior to the death,” and the market page wording, which referred to the last traded price “prior to confirmed reporting of death.”
Given the gap of several hours between Khamenei’s death and confirmed public reporting, during which significant trading continued, the distinction was material.
Sound the death knell: Much of the criticism centered on Kalshi’s own promotion of the market. As reports of Khamenei’s death were circulating on Saturday morning, the company posted on X announcing that the odds of Khamenei being out as Supreme Leader had surged to 68%.
Mansour reposted it. Amanda Fischer, a former SEC chief of staff now at Better Markets, described the platform as “more or less offering a proxy market on assassination.”
Markets commentator Kostya Medvedovsky called it “incredibly cynical stuff,” arguing that Kalshi was promoting a “leaves office” market while everyone believed the Supreme Leader was dead.
Schiff you can keep your head: The controversy arrives at a particularly charged moment for the prediction markets industry. Just days before the strikes, Senator Adam Schiff led five other Democratic senators in writing to CFTC chair Michael Selig, urging the agency to ban contracts that resolve on or closely correlate to an individual’s death.
The senators pointed to a series of troubling examples from Polymarket’s offshore exchange, including contracts on whether the Artemis II mission would explode, whether Maduro would be removed from power and whether a Ukrainian town would be captured by Russian forces.
The letter highlighted what the senators called dangerous national security risks, including incentives to incite violence, foment geopolitical conflicts and disclose classified information.
It also noted the potential for government officials and consultants with access to operationally sensitive information to profit from such markets.
Prescient and correct: The senators’ concerns about insider trading appear to have been borne out. Blockchain analytics have reportedly identified suspected insiders who profited from bets placed on Polymarket just minutes before the US strikes on Iran.
Some estimates put those profits at over $1.2m.
Polymarket’s own Iran-related contracts saw more than $529m in total trading volume.
Learning the ropes: For Kalshi, the episode raises difficult questions about whether the platform’s death carve-out mechanism is a meaningful safeguard or a fig leaf that allows it to operate what is in practice a market on whether a named individual will be killed.
Mansour’s post acknowledged that more can be done to improve the user experience and surface contract rules more prominently.
He described the episode as “good learning.”
What we’re reading
Geopolitical bets hit a record: Conflict-related betting on prediction markets hit a record last week as traders piled into wagers on the US-Israeli strikes on Iran. From Bloomberg.
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+More
Colorado: Lawmakers have introduced SB26-131, a bill that would significantly tighten sports-betting rules. The measure looks to ban promotional bonus bets, prohibit advertising between 8am and 10pm and during live sporting events, and impose a full ban on prop bets. It also proposes deposit limits of five per 24 hours, a credit card funding ban and removal of operator restrictions on successful players.
Indiana: Lawmakers have approved a revised bill to ban online sweepstakes casinos, with HB 1052 clearing both the House and Senate after amendments in each chamber. The legislation would prohibit sweepstakes gaming from July 1 and now awaits final approval from Governor Mike Braun.
Nevada: The Nevada Gaming Control Board (NGCB) has unanimously licensed former governor Brian Sandoval and ex-NGCB chair AG Burnett to serve as directors and managers on Resorts World Las Vegas’ board, a move approved by the Nevada Gaming Commission. Their appointments aim to strengthen governance and anti-money-laundering compliance at the Strip casino after past regulatory issues, including a significant fine. Both bring extensive gaming-industry experience to help guide the resort’s turnaround.
Austria’s public prosecutor has charged Novomatic owner Johann Graf and former Ainsworth CEO Harald Neumann with bribery over an alleged scheme to influence a Casinos Austria AG board appointment for political gain, tied to then-Vice Chancellor Heinz-Christian Strache. Prosecutors said the appointments were meant to secure undue advantages and influence government actions; both executives could face up to two years in prison. Neumann resigned from Ainsworth following licensing issues amid the investigation.
Polymarket filed an emergency motion with Nevada’s federal court late on Monday in a bid to reverse a block on its operations in the state. The same court also remanded the Nevada Gaming Control Board’s civil enforcement action versus prediction market rival Kalshi back to state court, where, gaming attorney Dan Wallach noted, Kalshi must deal with an imminent temporary restraining order barring it from offering event contracts in Nevada.
A Canadian lobby group is urging the Québec government to regulate online gambling in Canada’s second-largest province. The Québec Online Gaming Coalition, an industry-led group of some of the most influential iGaming names in Canada, said the government could lose out on more than $300m in tax revenue each year by not offering a regulated online gambling market.
What we’re reading
Stake and Drake: Bloomberg uncovers the shenanigans behind some of Stake’s biggest celebrity slots wins.
UK regulator crypto comments
A crypto pathway: The UK Gambling Commission is exploring a pathway to allow cryptocurrency as a payment option for licensed gambling operators, a senior regulator has revealed.
Miller time: Tim Miller, executive director at the Commission, told the Betting & Gaming Council’s AGM last Thursday that he has asked the Commission’s Industry Forum to begin examining how crypto payments could be introduced safely and in line with regulatory objectives.
Miller pointed to the government’s decision to bring cryptoassets under the Financial Conduct Authority’s (FCA’s) regulatory remit from October 2027 as a key factor shifting the Commission’s stance.
“These steps, progressing the FCA’s roadmap, does change the picture,” he said.
“That, as well as the growing appetite we see from punters, means we do now want to start looking at what the potential path forward would be to create a way for cryptoassets to be used as a consumer payment option for licensed and regulated gambling in Great Britain.”
The art of a deal: Miller acknowledged significant hurdles remain but struck a notably forward-looking tone, saying: “There will be significant challenges and risks to overcome in considering this topic, but I am keen that we approach this in the spirit of exploring the art of the possible rather than starting from a position of finding all the reasons not to innovate.”
Miller also framed the move as a weapon against the illegal gambling market.
He noted that Commission research shows crypto is one of the two biggest searches leading British gamblers to unlicensed sites.
You show me yours: More broadly, Miller used the speech to signal a new phase for the Commission following the completion of the Gambling Act Review, calling for a period of regulatory stability and urging operators to bring forward innovative ideas.
“If you have ideas, come and talk to us about them – show us your commitment to the licensing objectives and we’ll show you our commitment to supporting innovation,” he said.
Miller also addressed the departure of outgoing chief executive Andrew Rhodes, reassuring the industry that the Commission’s collaborative approach would continue.
He welcomed the government’s new Illegal Gambling Taskforce and confirmed he had met with Meta to push back against “not on GamStop” advertising on social media platforms.
Fee up: On the subject of Commission fees, Miller noted the proposed increase would take the regulator’s total income as a proportion of industry GGY from 0.21% to 0.28%, and urged operators to respond to the DCMS consultation before its March 29 deadline.
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Greek black market
Crackdown: Greece is stepping up its crackdown on illegal and unlicensed gambling, with the government estimating these activities cost the state approximately €400m in lost revenue last year.
The enforcement drive targets a growing black market that puts players at risk of fraud and data security breaches.
Under proposed draft legislation expected to take effect this spring, organizers of illicit gambling operations could face up to 10 years in prison and fines as high as €800,000.
The penalties extend beyond operators: advertisers and social media influencers who promote unlicensed gambling may be fined up to €50,000, and repeat offenders who participate in illegal gambling could also face prosecution.
Under the influence: A 2025 study by the Hellenic Gaming Commission (HGC) found that 10% of respondents identified influencers as their direct route into illegal gambling websites.
In addition to legal measures, the HGC is deploying advanced technical tools, including AI-driven monitoring systems, to identify and quickly block unlawful gambling sites.
The regulator has also been collaborating with Greece’s national health authorities to strengthen responsible gambling protections and address addiction risks.
Tipping the scale: The scale of the problem is significant. Government data from August 2025 estimated that unlicensed gambling transactions totaled roughly €1.67bn in wagers for 2024, involving approximately 799,000 individuals or around 9.5% of Greece’s population.
The illicit market has remained relatively stable compared to 2023, with average illegal spending per participant at about €2,089 in 2024.
Over the past three years, enforcement efforts have resulted in approximately 11,000 unlicensed gambling domains being blocked.
Calendar
Apr 28-29: Ethical Gambling Forum 2026, Leeds
May 26-28: Gambling & Risk Taking Conference, Las Vegas
Jun 4: Gaming in Holland, Amsterdam
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