Forbes has reached out to both Polymarket and Kalshi for comment.

How Have Iran War Bets Sparked Controversy?

Online betting markets related to Iran have sparked controversy throughout the war, starting with allegations Polymarket users may have had advance knowledge of the strikes on Iran that catalyzed the war in late February, which they used to make a big profit. The New York Times reported a surge in Polymarket bets of at least $1,000 that the United States would strike Iran by the next day had occurred one day before the United States and Israel launched strikes on Feb. 28. Polymarket did not respond to the Times' request for comment and said on its website that "accurate, unbiased forecasts" on the conflict in the Middle East are "particularly invaluable in gut-wrenching times like today." Early in the conflict, Kalshi froze a huge betting market, titled, "Ali Khamenei out as Supreme Leader?" on which users had waged more than $54 million, betting on when the former Supreme Leader would leave office. The betting platform did not issue payouts, saying it does not allow markets "directly tied to death," the Washington Post reported. Polymarket faced scrutiny over the weekend for operating a betting market allowing users to predict when a missing U.S. pilot whose jet was shot down over Iran would be found. Seth Moulton, D-Mass., slammed the online bet as "DISGUSTING" in a post on X. Polymarket, in a response to Moulton's post, said it "took this market down immediately" and it "should not have been posted," saying the market "does not meet our integrity standards."

What Are Polymarket And Kalshi's Policies On Iran War Bets?

Kalshi, which is based in the United States, is regulated by the Commodity Futures Trading Commission, which bans trading on war and death, the New York Times reported. Elisabeth Diana, Kalshi's communications chief, told the Times profiting on death is "not allowed on Kalshi, and that's a good thing." Kalshi operates several Iran-related betting markets, though, including bets on whether the United States and Iran will reach a nuclear deal and when traffic to the Strait of Hormuz will return to normal. The Times reported Polymarket primarily operates abroad and is not subject to the same regulatory restrictions, noting it operated and issued payments for a market on Khamenei's removal, though Americans were banned from betting on this market. Polymarket operates a number of markets about the war, including one on whether U.S. troops will enter Iran by a certain date and another about when the war will end. Each Iran-related market on Polymarket is accompanied by a disclaimer, in which the betting platform defends its markets as "invaluable." The disclaimer says Polymarket held discussions with people "directly affected by the attacks," claiming their prediction markets could "give them the answers they needed in ways TV news and X could not."

Polymarket, Kalshi Reach Monthly Traffic Peaks -- Greater Than Election-Fueled November 2024