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Isn't that a movie about insider trading? Yep. But it's the. Well, the whole point is that it helps us think about all the dangers that, that we need to protect the markets. Well, you want to tackle the issues head on, right? Right. Exactly. And you can also take a joke, I guess. Yeah, Exactly. That too I guess. Tarek Mansour and Luana Lopes Lara are the co-founders of Kalshi, a prediction market platform where you can bet on everything from today's weather to Taylor Swift's wedding. But back in 2018, when they founded their company, very few people outside of academia had heard of prediction markets.
These days, Kalshi seems to be everywhere with an in-your-face presence that's hard to ignore. Buzz, controversy, and a ton of money. Billions of dollars in trades. These are fundamentally corrupt markets. 75% of people lose money. Do you feel a moral obligation to be more transparent about that? I think we are very transparent that, you know, there are risks. People lose money and people win money. Its blockbuster growth has been fueled by a generation of users drawn in by the lure of easy money.
Why isn't Kalshi a casino in your pocket? That's like same as asking like why is AI good for society, right? Like these are large complex topics that cannot be summarized in a soundbite. But as Kalshi continues on its trajectory, it's now facing a host of new competitors, local opponents, and a very public debate about what this platform is and the potential harms it can cause. It can feel a little bit like being in the middle of a hurricane sometimes. Yeah. What speed are the winds blowing today? When I get to the office, we'll see.
Category five? Yeah, maybe. So this is your old walk to Goldman? Yeah. I really loved it. I mean, it was really cool and it's all buildings and finance and I'm a math geek, so you know, it's like really kind of a very exciting time. How does a mathematical mind see the world that the rest of us don't? So growing up in Lebanon, it was a very volatile country.
The delta, like the, the difference between good and bad can be an hour. All this chaos outside and this volatility and it was just like hard to stomach. What it made me do is view the world essentially more probabilistically. That has sort of in some ways propelled every decision I made all the way to starting Kalshi. Mansour left Lebanon to attend MIT and then became a trader on Wall Street. In 2016, he watched as big banks and hedge funds scramble to offset risk.
It was all about like Brexit and the Trump election and everybody was super stressed about that and you could feel the anxiety. No one saw it coming though. Yeah, that's the whole thing, right? A bunch of the sort of institutional investors were saying like, oh, what do we do? How do we kind of get a position on Trump winning? What's a Trump trade? But this is the thing that really got me excited about, well, what if these investors could just buy yes on Trump winning the election? That just seems like a much more
direct, simple way to do it. Kalshi is a peer-to-peer platform. Every trade is a contract, a simple yes or no on whether something will happen. By the yes, and somewhere on the other side, someone is betting you're wrong. The price of that contract moves in real time based on what the market believes. Kalshi makes money by charging a transaction fee on every trade. So Kalshi means everything in Arabic. Yeah. What does that say about your ambitions?
We want to build a financial market that is sort of anyone can basically participate in it. That doesn't mean everybody's going to win, but you have a shot to, if you do the research, if you learn, if you dig into topics, you get into rabbit holes, you can get better. So keep trying? I mean, should anyone stop? I don't know. I mean, I think 75% of our customers don't trade. They use it for the forecast. And the thing that they like about it is because in some ways prediction markets are sort of one of the only non-elite sources of information. When you look at prediction markets, it's bottom up.
It's people that are essentially putting skin in the game, money where their mouth is, and so people find the data very, very valuable. Have you been here before? I haven't. Oh, it's the first time? Yeah. What's the vibe? How would you describe the culture here? Right now it's pretty calm, I think. Culture is everybody's working and they're very focused. So good to see you. It's so good to see you.
Thanks so much for having us. Of course, of course. Thank you for having us. Mansour's co-founder and Kalshi COO, Luana Lopes Lara had an unorthodox path to the world of fintech. Growing up in Brazil, she trained as a ballerina before pivoting to math and computer science. There are a lot of stories out there. What's true or not true? Well, there's a lot of untrue. Yeah, it's like you can start there. So you met at MIT. Yep.
There's a story that Luana is the smart one and that you used to try to sit next to her to learn her study habits. She was more nerdy. Tarek was the type of guy that tried to seem very cool. I knew I wasn't cool. I'm like, "I'm not going to be cool. I might as well just study and be nerdy and sit in the front row." I also heard you used to date. True? Long time ago. Yes, that's true. How did you get beyond that to launch a starter? Well, the company. The company always comes first for us, essentially. And by the time we started the company,
it was basically already fizzled out. Company above all else, and you know it's worked out for us. In 2020, in the final months of the first Trump administration, they cleared their first major hurdle when they got approval from the Commodity Futures Trading Commission to become the first federally regulated event contract exchange. But Kalshi was limited to the kinds of markets the agency had traditionally regulated. When they tried to expand into elections, the CFTC then under the Biden administration said no, calling election betting a form of gaming. So Kalshi decided to sue its own regulator.
What made you so sure that was the right move? It was kind of the only option we had in a lot of ways, because if we don't do it, these markets might never see the light of day because we had another company that tried to do it and do it. So it was a sense of responsibility there, but also because we were right. In 2024, just weeks before the presidential election, Kalshi won its lawsuit against the CFTC and started offering markets on elections. Prediction markets were thrust into the national conversation as betters rushed in. And while polls showed Kamala Harris and Donald Trump neck and neck, Kalshi's markets gave Trump over 60% odds. In the weeks around the election,
Kalshi processed over a hundred million dollars in trades. Looking at our billboard right in Times Square. Wow. We realized with obviously the number of users coming in, the volume, how much it was cited by the media, we realized, oh wow, it's like actually, it actually might be happening for real now. With Donald Trump back in the White House, prediction markets that the Biden administration flagged for review were suddenly fine. Since then, the bets have kept on coming. The breakneck growth of prediction markets has been led by two players, Kalshi and its arch rival, Polymarket led by CEO Shane Copeland. And the hostility between Mansour and Copeland is well documented.
How bad is the bad blood? It really isn't that bad. It certainly seems bad if you read the tabloids or even tweets. The tabloids are, you know, the tabloids love drama. I mean, they're tabloids, right? Like it all is centered around, you know, doing the right thing. And when you have an actor that essentially doesn't do that, that can basically like sully the industry a little bit. The coverage is it doesn't say Polymarket did X, Y, Z. It says prediction markets did X, Y, and Z. And we are put in a position where you always have to explain to people that like, no, we're not doing war markets.
We're not doing death markets. Polymarket didn't respond to our request for comment. The company says it prohibits insider trading and manipulation and that Kalshi's ads are misinforming the public, which only harms the industry as a whole and participants. Kalshi says it doesn't offer markets on death, assassinations or war in keeping with US regulations, but playing by the rules doesn't mean Kalshi is content to play it safe. Their ads make that pretty clear. If history has taught us anything, it's not to root against the underdog. Yet as the number of prediction markets has grown, so has the temptation for some to trade on insider information.
Federal regulators said a White House teleprompter operator made over $100,000 by placing bets on Trump's speeches. Former US Representative George Santos posted on social media that he would show up for the state of the Union. Meanwhile, he placed multiple bets on Kalshi that he would not attend, making over $17,000. I'm going to be in the gallery. I never said I was going to be on the floor or maybe. The CFTC called it manipulation and Kalshi banned him for life. I know you are very busy because there is not a lull in these markets.
Bloomberg reporters Christopher Beam and Denitsa Tsekova have been covering the explosive rise of prediction markets day in and day out. How many more cases like this are we likely to see? I think it's inevitable. The incentives are there and when the incentives are there, someone's going to take advantage of it. Kalshi says that they are cracking down on insider trading, cracking down on manipulation, but you also have to wonder how far that's going to extend. As those markets grow and as the group of people who have that information grows,
I can see how this is harder and harder to prosecute. Quick game. Great. Insider versus expert. A White House staffer on a presidential announcement. That would be an insider. A player's girlfriend or boyfriend on injury status. Well, one, we'd never do this market and two, that would be an insider. A Federal Reserve employee on interest rates. If they have knowledge beforehand of what they're going to decide, definitely insider. So if you have a market for just about everything, almost everyone can be an insider. Like can't anything be gamed? Manipulation and insider trading exists in all financial markets, the same way that fraud and cheating exists in any system.
The key thing is how do you regulate that system to make sure you root out the insiders and the cheaters and establish fair rules of the road so that people can participate fairly? Yet the CFTC, the very agency that's supposed to police all of this, has been hollowed out. Under President Trump, the five-person commission is now down to one man. Chair Michael Selig, a Trump appointee who's acted more like a champion than a watchdog. This is financial market activity, so it's something that I think is valuable to society.
Meanwhile, the markets he's supposed to be watching keep expanding. None faster than sports, Kalshi's biggest category. During the World Cup, Kalshi recorded $27 billion in trading volume and added three million new users. You've talked a lot about how Kalshi is diversifying away from sports, but by our count, it's still 75% of volume. So how diverse are you if sports still pays for this? Yeah, I'm not sure if that counts right. I mean, depends on how you count. So it's lower. I mean, we are at 95% at the beginning of the year.
We're much lower now. I think it's like two thirds or 70%. And so they tend to be an effective way for people to basically come into the product, experience it, understand it, and then they start exploring other things. Sports betting is legal in nearly 40 states, but those operators pay millions in state licenses and taxes. Kalshi doesn't. What are Kalshi's biggest threats at this point? Well, the states. Particularly the gambling companies based in the states and regulated by the states. Obviously the gambling companies want to make money, the states want to raise taxes, and so they are probably the biggest antagonist to Kalshi right now.
Without sports, what is Kalshi? A much smaller company. Kalshi operates as an exchange and says it's different from sports books, which take the opposite side of bets and win when their betters lose. Opponents argue Kalshi is a gambling platform that has found a legal loophole. 44 states have signed a letter calling prediction markets a new form of casino, and 20 are fighting in court over whether state sports betting laws apply. The CFTC has responded by suing states right back in what's become a full-blown turf war over who should regulate prediction markets.
What happens to Kalshi if sports betting goes away? It's hard to imagine a world where you're going to carve out specific topics because some people believe that's okay versus not others. And then the structure is sort of the key thing that determines how we should be regulated. What we're focused on is making sure that people understand that difference between an exchange and how it works and a sportsbook and how it works and why they're different, like one is federally regulated and one is regulated at the state level. Why isn't Kalshi a casino in your pocket? It looks and feels like gambling. It looks like someone's speculating, feels like it's like a form of gambling, but there's a key distinction and key difference.
On Kalshi, when customers lose, they don't lose it to me. They lose it to other customers. So my role is to establish fair rules of the game for the marketplace to thrive. But you do take a fee on every trade. Yeah, we're not a nonprofit. New York Stock Exchange takes a fee on every trade, right? We take 0.8%, they take something similar. That doesn't make New York Stock Exchange gambling. But the more people bet, the more money you make, so your incentive is volume. Do you have a financial interest in more people betting more, whether or not it's good for them?
I have a financial interest in having more users, yes. The same way that the NASDAQ has a financial interest in having more users and more volume. I mean, NASDAQ is not figuring out who are their winners and who are their losers and treat them differently. Do you know what a prediction market is? It's something that's come out of gambling and trading too. And then it's just something that people are using just to pass the time.
Is it gambling or is it trading? It's the same thing as gambling. I mean, it's just essentially you could bet on anything. Like 20, 30 years ago, the generation had to go out and go out of their own house to gamble where now you can just wake up and 10 seconds later you're gambling. I know it's affecting my generation bad. I mean, I know friends that are addicted to it and it ruins lives. Does it sound like gambling to you?
I think that if you exercise restraint. I think it can go either way. I think that if you're doing it as like a fun hobby, then absolutely. So if it's vibes based, it's gambling. I think for your average user, the experience of using a prediction market is pretty much identical to using a gambling app, which is why this argument that, oh, it's not sports gambling, it's derivatives contracts, event contracts, those are kind of technicalities that might pass muster in a court, but I think for your average person just don't really pass the smell test.
The question of whether Kalshi is a financial exchange or a gambling company may ultimately be decided by the highest court. Does the Supreme Court take up the case of who should regulate prediction markets? Yes or no? I'd probably say yes. I don't know. That's a question for lawyers. I mean, I don't know. Trump has made it clear he thinks this is the federal government's turf. His son, Donald Trump Jr. is an investor in Polymarket and a paid advisor to Kalshi. In 2025, he received a $300,000 equity stake in Kalshi that's now potentially worth millions.
I don't think we've ever had the family of a sitting president being so closely involved in a financial instrument that's growing so fast, and that clearly has a lot of regulatory questions raised. The CFTC has been incredibly defensive, so I think that's the dynamic that, to certain extent, is facing some scrutiny. How often do you personally talk to Donald Trump Jr.? Not very often. One specific thing he's advised you on? It was really always focused about going direct and talking to our customers and people directly.
We don't talk about regulatory or policy. It was always made clear from the start by both parties that there will not be any involvement on that front. Earlier this year, Donald Trump Jr. reportedly showed up at a closed door gathering of Republican Attorneys General and told them to back off prediction markets. The controversy hasn't slowed down Kalshi's marketing machine. Chasing new users, they've aggressively gone after Gen Z with celebrity ads, viral TikToks, and influencer deals.
You will be the first millionaire in your family. Oh my God, they're going over. No. Prediction market traders often focus on a category where they think they have an edge. What are you trading on Kalshi now mostly? Just the weather. I usually just do high temperatures. I had a theory last year where while it was cooling down, people were underestimating the temperature would be consistently, and for a few days in a row it was actually easy to cash in on that. Yet traders like Joseph, who win more often than they lose, are the minority.
Do you worry about young people getting hooked? Irresponsible users are a real worry for any of these types of products. The law today is 18 plus, and I follow the law. And so that question is also better addressed to policymakers. Like if policymakers are supportive to move that to 21 plus, that is something that we would respect. There are influencers all over social media saying they made easy money on Kalshi but when you look at the numbers, 75% of people lose money.
Do you feel an obligation, a moral obligation to be more transparent about that? I think we are very transparent that there are risks in every trading product. There are risks. I would say though that the 75%, what's interesting to me is that actually it's never quoted next to how many people lose money day trading. I think these day trading options get 95% of retail loses money. What do you make of their argument? Well, yeah, it's common knowledge that day traders lose a lot of money, and therefore I was taught from an early age not to try to day trade.
We're seeing some recent studies say people are more likely to allocate some of the money they'll actually put to investing and put it in sports betting. So I think the most important thing is the money you put there, where is it coming from? Is it coming from money that's allocated for your future, money that's for investments, money that potentially in the long term, if you put in different vehicles, can give you better returns? This year alone, users between 18 and 21 who would be too young to walk into a casino in most states traded $5 billion on Kalshi.
We are a financial exchange and we follow the same rules that everyone else does, but I think if those rules are to be changed, we'll follow the new rules. But for us, what we think is better is never trying to stop something from happening because the people would just go offshore or do it in another way that is unregulated and way worse. At what point do you stop pointing to a worse option and take responsibility? We're not just here saying like, "Okay, there's a worse option so we don't have to do anything." I'm actually here saying, "Let's talk about regulation.
Let's figure out what are the right regulations and figure out the right safeguards." But we are actually welcoming that conversation. And when we talk to policymakers, our message is not, "Hey, there's nothing to see here." Our message is like, "Let's regulate it. Let's figure out what are the right guardrails and where are the gaps?" There's just this huge settlement with Meta, massive numbers, restrictions on their platforms now. Do you see any parallels there? There are parallels that any type of technology comes with risks, for sure. Like AI comes with risks. In our market, and this is true for any type of financial markets, it's true for options, it's true
for futures, it's true for stock market, it's true for prediction markets. There will be a small percentage of customers when you enable them to speculate on different things that will be irresponsible users, like irresponsible trading. But critics say platforms like Kalshi should create more safeguards for their youngest users, some who've learned to gamble before they've learned to save. It'll start off, you know, you'll make a few bucks here and there. You'll think it's easy money. It just goes down from there.
How much have you lost? Like 5K. Okay. Things are so expensive nowadays. The only chance they have is gambling and that's just not a good mindset and they made it so like accessible. Even as concerns grow about prediction markets and gambling addiction, Kalshi is doubling down on the category that arguably started it all, elections. Elections really are the holy grail of prediction markets, right? They are the one that proves to everyone what these markets are.
They prove the utility of these markets, and they are also the one that provide the most value. With the 2026 midterms, Kalshi is making a play to be seen as a go-to source for election odds. Critics say it's more likely to add confusion and give bad actors a new tool to spread misinformation. Okay, so this is the midterms hub? Oh yeah. So what we did is we broke this down into three. Couple themes here. Like you'll see Senate, house, governor, balance of power, which is an amalgamation of all these combined.
We love showing like how things change over time as more data comes through. Kalshi's midterms dashboard certainly looks official, but look closely. Those numbers aren't polling data, they're bets. And with elections, the stakes of getting manipulated aren't just financial. They go to the integrity of the vote itself. Polls do have a credibility problem, but our prediction market's really that much better. When you put money on the table, things become more complicated.
What if I have an incentive to push a certain candidate's odds higher than there certainly are? What we see is that in smaller races, state representative or mayoral elections, it can take as little as a few thousand or even a few hundred dollars to push a candidate's odds up or down. In January, an anonymous polymarket trader spent $44,000 to push a California gubernatorial candidate's odds to 96%, even though polls had him at less than 5%. A recent study found that for $3,500, you can move 97% of midterm related prediction markets by five cents or more. That's a remarkably cheap way to shape public perception, especially if those odds are being displayed on national
television, visibility that Kalshi is currently paying for through partnerships with several media organizations. Putting prediction market data next to polls on television, do you think this could confuse viewers? I think it definitely creates the question of like, is it clearly defined? What are the polls saying? What are prediction markets saying? But having them right next to each other and comparing them, I think it definitely can create a lot of issues. Do you feel like the stakes are high with this election? I think it's always, you know, around any big tent pole moment, you're always going to have more energy and attention and all that, which is good. That's what we want.
The way I would phrase it is like the stakes are high and the onus anonymous to educate people about how to use them. Whoever wins or loses in the midterms or what the results do to public confidence in the vote, Kalshi will take its cut. Ironically, the fickle world of political fortunes could be an existential threat. What happens to Kalshi when Trump leaves office when there's a new administration and perhaps the regulatory pendulum swings back? You know, we have supporters and detractors from both sides of the aisle, some people that see it and some people that don't see it or don't see it yet. To me, it's really the focus is like, okay, we have tens of millions of customers now.
This is a fast growing industry outside of AI. It's an industry that's here to stay. It's not about whether prediction markets going to be here or not. We're way past that point.
