Bets Tied to CEO Murder Case Test Limits on Event Contracts (2)

One week after the Dec. 4 murder of UnitedHealth Group Inc. executive Brian Thompson, Americans were able to bet on the fate of his alleged killer. Some people, including financial regulators, may have a problem with that.

Contracts offered by Kalshi Inc., a New York-based exchange, allow retail traders to put money on the outcome of nearly anything. Kalshi listed wagers on Dec. 11 related to Thompson’s death that included whether the suspect, Luigi Mangione, would be extradited to New York from Pennsylvania, whether he acted alone and whether he would be convicted or plead guilty.

Two days later, ...