Bets on prediction markets over the fate of Iran’s Supreme Leader, the Ayatollah Ali Khamenei, have been active since at least December, and reached a frenzy in the hours leading up to and after the Feb. 28 U.S./Israel attack on Iran. These short-term wagers are made mostly on Kalshi and Polymarket, the two biggest prediction markets in the U.S. Kalshi falls under regulations by the U.S. Commodity Futures Trading Commission (CFTC), which does not permit bets on wars, terrorism, or assassinations, so Kalshi merely offered the chance to bet on Khamenei being “out as Supreme Leader,” or the time of the attack. However, Polymarket was designed to be an offshore market that is completely unregulated.
Kalshi and Polymarket claim to provide a vital public service and that even bets such as the ones regarding Khamenei’s fate serve an important economic role. Polymarket’s website explains, “The promise of prediction markets is to harness the wisdom of the crowd to create accurate, unbiased forecasts for the most important events to society.” However, others charge that the markets are scenes of insider trading, and in fact, in February Israel arrested army reservists for using classified Israeli military intelligence to place bets on earlier strikes on Iran. In January, an anonymous trader made a suspicious $400,000 profit on several bets on the ousting of Venezuelan President Nicolás Maduro. The last bet was placed just 48 minutes before President Trump gave orders for military action.
