Prediction market bets on Iran strikes spur allegations of insider trading

Bets placed on the ouster of Iran’s Supreme Leader Ayatollah Ali Khamenei drew scrutiny of prediction markets such as Polymarket and Kalshi on Monday, sparking calls from Democratic U.S. lawmakers to outlaw wagers on military actions ‌that could enrich officials with inside knowledge.

Khamenei was killed in Israeli air strikes on Iran’s capital, Tehran, over the weekend. U.S. lawmakers and analysts flagged bets that had been placed on his ouster both in January and right before the attacks, stoking long-simmering concerns over the legality and ethics of such trades, and the potential for insider trading.

According to a Reuters review of Polymarket’s website, $529 million US was laid ​on a series of contracts tied to the timing of attacks and $150 million was ​bet on contracts on the removal of Khamenei as supreme leader.

Analytics firm Bubblemaps said on X that six accounts made a $1.2-million profit from Polymarket bets funded in the hours before Saturday’s raids. Rival Kalshi also ran a market on “Khamenei ​out.”

“It’s insane this is legal,” Democratic Sen. Chris Murphy said on X on Sunday in response to Bubblemaps’ post, ⁠adding — without providing evidence — that people around ⁠President Donald Trump were profiting from the conflict. “I’m introducing legislation ASAP to ban this.”

“The ‌only special interest guiding the Trump administration’s decision-making is the best interest of the American people,” Davis Ingle, a White House spokesman, said in an email.

California Rep. Mike Levin, a Democrat, also took to X on Saturday to flag a Polymarket bet placed shortly before the Iran strikes.

“Prediction markets cannot be a vehicle for profiting off advance knowledge of military action. We need answers, transparency and oversight,” he wrote.

Democratic ⁠senators on Feb. 23 raised concerns that prediction markets breached U.S. rules, and created incentives to foment conflict and disclose classified information, after a mystery trader made a roughly $410,000 profit betting on the ouster of Venezuelan president Nicolas Maduro.

Polymarket did not immediately respond to a request for comment but has argued that prediction markets ‌harness the wisdom of crowds to create accurate, unbiased forecasts.

Kalshi said it does not allow wagers directly tied to death. CEO Tarek Mansour said the company did not profit on the Khamenei market, after refunding fees to users. Kalshi is a regulated platform and says it bans insiders.