As the United States and Israel prepared for war and later launched strikes against Iran, traders on online prediction markets wagered over $1 billion on every aspect of the conflict, drawing a wave of scrutiny.
One week after the attacks began, traders are still betting millions of dollars on who will be the next supreme leader, how long Iran will shut down the Strait of Hormuz, whether US ground troops enter Iran, which countries Iran will strike, whether the son of the late shah will return, and dozens of other Iran-related questions.
And before the attacks, so-called “death markets” emerged around whether Iran’s supreme leader, Ayatollah Ali Khamenei, would be ousted, potentially through assassination – which ultimately happened on Feb. 28.
Demonstrators hold images of Iran's late Supreme Leader Ayatollah Ali Khamenei, after he was killed in Israeli and USstrikes on Saturday, in Tehran, Iran, March 6. Majid Asgaripour/Wana News Agency/Reuters
Other sizable and well-timed bets, placed mere hours before airstrikes began, correctly predicted that strikes would soon occur, raising questions from critics about whether there was insider trading by government officials or others who knew the war plans ahead of time.
It’s now routine for questions like these to arise after major geopolitical events, with the rapid growth of prediction markets like Kalshi and Polymarket, where users bet on everything from elections, sports, business, entertainment, or even the daily high temperature in various US cities.
But the Iran trades sparked broader outrage: Lawmakers expressed alarm about a lack of regulation, traders vented about unclear market rules, government watchdogs worried about possible corruption, and academics wondered aloud about the morality of wagering money on
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