Kalshi Sued Over Refusing to Pay Out Prediction Market After Iran Leader's Death

[Oshosondy]

We were discussing about what Kalshi did on this thread: Kalshi caught changing rules last minute, making users lose money

The last post on the thread was 5 days ago. Also to make more people see what is going on as some people posted on the thread that Kalshi should be sued, the prediction market has been sued.

You can also read about the suit: https://decrypt.co/360293/kalshi-sued-refusing-pay-out-prediction-market-iran-leader-death

Who is going to win the suit?

[Beparanf]

We were discussing about what Kalshi did on this thread: Kalshi caught changing rules last minute, making users lose money

The last post on the thread was 5 days ago. Also to make more people see what is going on as some people posted on the thread that Kalshi should be sued, the prediction market has been sued.

You can also read about the suit: https://decrypt.co/360293/kalshi-sued-refusing-pay-out-prediction-market-iran-leader-death

They deserved it since what they do is clearly scam. A prediction market that change the rules while the bet was already open shouldn’t be trusted to run a service that based on trust.

This is a class action which means Kalshi will be pressured to negotiate on affected users.

I don’t have an idea how this kind of case roll in California but is having a rules set by the accused can be honored?

[noorman0]

Isn't anyone interested in creating a new betting topic about who will win this lawsuit, anyway?

Tbh, this makes people more suspicious of prediction market operators, they always have a lot of control over the resolution criteria, and in edge-cases like this (death of the leader in the middle of a conflict), it can look like they are benefiting themselves or avoiding a big payout. However, the house always has the edge.

[Moreno233]

I saw this post somewhere in X where a user claim that Kalshi had refused to payout winning relating to the killing of Iran supreme leader. I think that post correspond to the one you added in your post and from my understanding, the issue is possibly because of technicality because Kalshi is claiming that death was not part of their option which means they were expecting him to be forcefully removed from office. I blame Kalshi for failing to understand that the only way to remove him out of office was through death because Iran is not Venezuela where they can go and capture their leader.

[Charles-Tim]

They deserved it since what they do is clearly scam. A prediction market that change the rules while the bet was already open shouldn’t be trusted to run a service that based on trust.

I also think that the lawsuit is good, I posted that the prediction market should be sued and it happened within a short period of time and which is very good:

The prediction site should be sued by those that won the money.

Isn't anyone interested in creating a new betting topic about who will win this lawsuit, anyway?

There is no need to have a poll about who is going to win the lawsuit. That can also be discussed on this thread just to avoid repeating posts.

[robelneo]

They deserved it since what they do is clearly scam. A prediction market that change the rules while the bet was already open shouldn’t be trusted to run a service that based on trust.

When the community believes the platform is justifying a wrong decision, they will lose their reputation and tarnish their image, leading to the loss of loyal players and, eventually, revenue.
They should pay the winners rather than paying for more damages when the decision is ruled in favour of the bettors.

[batang_bitcoin]

Isn't anyone interested in creating a new betting topic about who will win this lawsuit, anyway?

Better to put that up in polymarket as if it will be done through kalshi they might just disqualify the winners. 

Who is going to win the suit?

The winners and those who are being refused to pay by kalshi. But I think that they'll try to make some reasons that it's a type of prop/prediction that they should have made for playing out or betting for someone's death.

[Vaculin]

Now this is a big issue for them. If it turns out they really cheated the bettors, they will likely lose, and once that happens the whole industry will know about it.

Reputation matters a lot in this space. One serious case can destroy a business, especially if it’s already brought to court where things become more formal and the real details can come out. If they still want to protect their reputation, maybe the best option is to settle it while it’s still possible. Even if they have to pay more to compensate the winners, it could still be better than letting the damage grow even bigger.

[YOSHIE]

Who is going to win the suit?

The value of $54 million is quite a large number, I'm sure Kalshi if this lawsuit wins in Class Action the prediction site will have to sell it to cover the payment or maybe Kalshi will have to give legal action to the followers.

I have also read about the post-Khamenei assassination lawsuit case, which was explained by the CEO of Kalshi.

Kalshi CEO Tarek Mansour defended the policy, stating that his company does not offer markets that are “directly related to death” because doing so could create an incentive to harm public figures.

Kalshi market rules state that if Khamenei dies, the contract will be settled at the price of the last transaction before his death — not at full payment.

After mounting criticism, Kalshi said it would reimburse all costs and net trading losses from the company's pockets.

From the new data that I have seen, it can certainly be concluded that Kalshi will pay for this lawsuit as in the quote above, however the Class Action win in this lawsuit is supported by various criticisms from the users themselves.

[Cryptomultiplier]

Now this is a big issue for them. If it turns out they really cheated the bettors, they will likely lose, and once that happens the whole industry will know about it.

Reputation matters a lot in this space. One serious case can destroy a business, especially if it’s already brought to court where things become more formal and the real details can come out. If they still want to protect their reputation, maybe the best option is to settle it while it’s still possible. Even if they have to pay more to compensate the winners, it could still be better than letting the damage grow even bigger.

You have got to read the case profile well to understand both parties and right now, it seems Kalshi is standing on the grounds of their rules as regards no death betting and might instead refund instead of to pay winnings.

​This case is just the beginning of some of the major test that the predictions market would have to face before they become more legitimate markets.

[bitbollo]

This is a well known and general problem with prediction markets and in general with all gambling sites.
I would not surprised if this will end in nothing more than a waste of time or a silly reimbursement for people involved.
For sure this is a bad promotion for their service. Probably they would not noticing a difference but many gamblers "old style" sould never join a market without clear rules on it.

[Kavelj22]

​This case is just the beginning of some of the major test that the predictions market would have to face before they become more legitimate markets.

With this case in particular, if it's not clearly stated from the beginning in the prediction rules that death is not a possibility to be considered, then this is a complete scam from the beginning, since expectations are based on realities in a state of war where death is one of the most expected possibilities. Otherwise, it will be a tricky probability that gives the house more chances to win beside few chances for predictors.

At the same time I am not with the side to sue the whole prediction market because of the scammy behavior made by one entity. There are still legit ways to operate.

[Davidvictorson]

Who is going to win the suit?

Kalshi is going to lose.

However, this is good because it will force them to become more transparent about their rules. I hope that the other businesses in the prediction market are taking notes.

A crazy thought came to me now and it is that there should also be a prediction on who will win the suit.

[Odusko]

The term of their service somewhere made player's vulnerable in terms of rights and since there is a clues that states that in the event that the president get killed the gambling sites take the winning, since his leaving office didn't include death, their may have case against the bet provider, but with weak regulations is tough to get winning case the law suit may become a waste of time.

[Pmalek]

This is going to be an interesting lawsuit to follow. If Kalshi really had a so-called “death carveout provision” on the Ayatollah market and this wasn't hidden from the bettors (they could read about it in the rules), then the plaintiffs don't have a case. That's my layman's view. It would be similar to breaking a rule in a regular crypto casino's T&Cs and saying you didn't agree to it or that you didn't know that such a rule exists. That's no argument. It's written in the TOS. You agree to the TOS when you sign up.

I am curious to see the verdict in this case.

[un_rank]

Imagine if Kalshi opened a market to predict who will win the lawsuit against them, that will be very ironic.

In this case it fully depends on if they had a public term about the death carveout which players agree to when registering. If that is available it will help their case and they can drag out the hearing for a very long time or even get the case dismissed.

I understand the reasoning behind their stand but they will need to be clearer when picking markets and make it as clear as possible to takers.

- Jay -

[Myleschetty]

Since the lawsuit concerns a US customer, I won't be shocked if the customer wins the case unless the prediction market employs a competent attorney who specializes in these kinds of cases, or unless the prediction market already has clear rules and regulations that allow them to make changes to their prediction game at any time if it involves a person's death.

[Wakate]

Currently we have been hearing rumors about the leader of Iran is not death. I called it rumor due to different videos that had been surfacing online making it difficult for people to believe if Iran still have a leader or not. The president of the United States, Donald Trump had already confirmed his death few days ago that sent a negative signal to every part of the world.

Since the case is in court, it's going to take sometime for us to know the final judgement about this case and who is going to be the winner. I think Kalshi is going to lose this case definitely.

[Bitcoin_Arena]

They should have taken the L and given the winners their deserved winnings. Changing rules or adding rules that were not there after the outcomes of the predictions have happened is an outright scam.

I think Kalshi is going to lose this one, and they may end up being under scrutiny by law enforcement. They have no idea how much attention they are going to draw to themselves.

[Nathrixxx]

What the deed is not right and I'm sure that everyone is quite aware of it, however, we also have to consider some of the conditions or rules that engaged playing prediction market, so for this reason, you can vividly see how it is very difficult for gamblers to be able to win prediction market each time they place such, even if this lawsuit is won, we can't similarly prevent possible occurrence in the future.