Prediction market trader earns $553,000 by betting on death of Iran’s supreme leader

A trader identified as ‘Magamyman’ generated over $553,000 by gambling on the prediction platform Polymarket that Iran’s Supreme Leader, Ayatollah Ali Khamenei, would be removed from power just before his death during an Israeli attack last Saturday. The transactions raised concerns among some members of Congress and critics of prediction markets, who claim that these platforms enable individuals with access to classified details to benefit from lethal military operations. Just on Polymarket, approximately half a billion dollars was exchanged on when precisely U.S. forces would strike Iran. “It’s unbelievable that this is considered legal,” Senator Chris Murphy (D-Conn.) remarked. “Individuals connected to Trump are gaining from war and fatalities,” he added, pledging to introduce a bill swiftly to ban this type of activity.

The White House refuted any involvement by Trump’s associates in the lucrative transactions. Nonetheless, the Trump family has connections to Polymarket. Donald Trump Jr., the president’s son, serves as an adviser to Polymarket, and his venture capital firm 1789 Capital has invested millions in the controversial enterprise. Two federal investigations launched by President Joe Biden’s administration into Polymarket were dropped by the Trump administration.

This occurrence has provoked a conversation about how members of the government and military can monetize state secrets. In January, an unnamed trader earned hundreds of thousands of dollars for placing unusually timely wagers ahead of Venezuelan leader Nicolás Maduro’s apprehension. Two individuals in Israel were accused in February of utilizing classified intelligence to bet on Polymarket about impending assaults on Iran when those countries engaged in a 12-day war last June. The millions aimed at the toppling of Iran’s supreme leader were obtained through an offshore exchange run by Polymarket, which puts it out of regulatory control in Washington.

Despite the Trump administration approving Polymarket to establish a U.S.-based platform, it has yet to become fully operational. Numerous American traders accessing Polymarket do so via a virtual private network that conceals the user’s identity and location. While most prediction markets have gained popularity in recent times, they are mainly overseen by the Commodity Futures Trading Commission due to their classification as “futures contracts,” rather than gambling.

In line with U.S. commodity trading statutes, betting based on death and war is unlawful because it rewards violence, human suffering, and geopolitical instability. This restriction was noticeable over the weekend when Kalshi, another prominent prediction market, reacted to a market associated with when Khamenei would be removed, attracting over $54 million in transactions. Later, following Khamenei’s passing, those who bet on Kalshi for his ouster projected a payout that never materialized, resulting in a pause on market trading while a “further review of the situation” took place. Kalshi’s CEO Tarek Mansour announced that fees garnered from the Khamenei market would be reimbursed. Trader sentiment surrounding this decision was one of feeling misled and cheated.