Prediction markets scrutinised over Iran bets
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Analysts drew attention to a wave of wagers placed on Ayatollah Ali Khamenei's removal, while critics questioned the legality of the markets.
PHOTO: EPA
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SINGAPORE - Betting payouts following US attacks on Iran
Mr Khamenei was killed in Israeli strikes over the weekend
Odds moved sharply as rumours of his death circulated and analysts drew attention to a wave of wagers placed on his ouster both right before the attacks, as well as in January, while critics questioned the legality of the markets.
A total US$529 million (S$668.8 million) was laid on a series of Polymarket contracts tied to the timing of attacks – returning payouts to those who bet on Feb 28 as the date of the first strikes – and US$150 million across two now-disputed contracts on the removal of Khamenei as supreme leader.
Analytics firm Bubblemaps said on X that six accounts made a US$1.2 million profit from Polymarket bets funded in the hours before the Feb 28 raids.
Separately, Polysights, another analytics platform, had noted on X a wave of buying in mid-January from new wallets, with little or no prior activity, on Iran-related contracts, concentrated in Polymarket wagers on “Khamenei out” by the end of March.
Polymarket had no immediate response when contacted by -email. Its “Khamenei out” contracts are in a “debate period” after token holders disputed its resolution.
Rival Kalshi also ran a market on “Khamenei out” and ended up reimbursing fees to traders and returning payouts at the last-traded price before his death, according to its chief executive, who took to social media to defend the firm’s handling of the bets.
“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,” Kalshi CEO Tarek Mansour said on X.
Legal questions
Prediction markets offer tradable yes-or-no contracts that allow users to bet on a wide range of real-world events from sports to politics and the economy. Bet costs fluctuate between zero and 100 cents, depending on order flow, and typically pay US$1 to successful bettors when an outcome is confirmed.
Under US law, wagers contrary to the public interest – which may involve war or assassination – are prohibited, and in February six Democrat senators had raised concerns prediction markets breached the rules, in a letter to the Commodity Futures Trading Commission (CFTC).
Prediction markets exploded in popularity since the 2024 US election, when their real-time probabilities proved more accurate than polling in predicting Mr Donald Trump’s victory.
In 2025, prediction markets saw US$47 billion in global trading volume, according to analysts at brokerage Clear Street, a betting plunge that is attracting legal blowback and flattering attention from Wall Street.
New York Stock Exchange parent Intercontinental Exchange has taken a US$2 billion stake in Polymarket, while trading platform Plus500 in February launched prediction markets on its US retail interface through a partnership with Kalshi.
They have also faced scrutiny for insider trading and have grown in a regulatory grey zone, with the prediction markets arguing that they be regulated under the CFTC, not state gambling authorities.
In January, a mystery trader made a roughly US$410,000 profit after betting on the ouster of Venezuelan president Nicolas Maduro. REUTERS
