Kalshi is much smaller than many people imagine. Most of the company's 200 employees work in an open-plan office in Manhattan's Meatpacking District, not even occupying an entire floor of a building.
Yet today, Kalshi and a host of prediction market platforms like Polymarket are almost omnipresent.
They are major sponsors of major sporting events, and media outlets frequently cite their data in coverage related to politics and financial markets. Users can wager on the probability of various events occurring on these sites: the final score of a soccer match, the results of a new drug's clinical trials, what content President Trump's speech will touch on.
Kalshi was founded in 2018 and officially opened to the public in 2021. Its founders are two graduates fresh out of MIT: CEO Tarek Mansour and COO Luana Lopes Lara. In May of this year, the company completed a new round of funding, reaching a valuation of $220 billion. Mansour grew up in Lebanon, and Lopes Lara is from Brazil. According to Forbes calculations, both are only 30 years old and have already become billionaires.
In the United States, prediction markets are regulated by the Commodity Futures Trading Commission (CFTC) and, once approved, can operate nationwide. Gambling companies, however, need to obtain permits from each state individually; the regulatory rules differ. A New York Times investigation revealed that recent staff reductions and relaxed enforcement by the CFTC have objectively fueled the growth of the prediction market industry.
The industry's rapid expansion has attracted a large number of investors and new entrants, including individuals with ties to the Trump family: Donald Trump Jr. is an investor in Polymarket and also serves as a paid advisor to Kalshi. Mark Zuckerberg of Meta Platforms is also interested in entering the prediction market space.
Some lawmakers and regulators believe prediction markets are merely gambling with a different coat of paint. The industry also faces risks of insider trading: in recent months, a U.S. soldier involved in the capture of Venezuelan President Maduro placed bets on related events on Polymarket; a White House teleprompter operator placed bets on Trump's speech content on Kalshi.
New York State Attorney General Letitia James recently sued Kalshi, accusing it of operating illegally and circumventing state gambling laws. Kalshi called the lawsuit a "political stunt" and stated that states have no authority to order the company to cease operations. More than ten states have introduced regulatory bills targeting prediction markets this year.
In its last funding round disclosure, Kalshi claimed its platform's annualized trading volume had surged to $178 billion. In Mansour's view, markets that allow people to back their predictions with money have significant value, helping to "calibrate" (a word he frequently uses) a world "overloaded with information but lacking in truth."
The following is the content of the interview, edited and condensed for readability.
Tarek Mansour
Q: You once stated that one of Kalshi's visions is the "financialization of everything." Many people find this concept dystopian. Why do you think it's a good thing?
I think people have taken that phrase out of context. The beauty of prediction markets is that they transform subjective, emotional, and partisan debates into a mathematical, objective system with clear and transparent incentives. If you immerse yourself in research, analyze rationally, and strive to uncover the truth, you are likely to profit; if your views are biased, detached from reality, or extreme, you will likely lose money in the end.
This kind of market has a unique sense of order: you can clearly discern the motives behind others' opinions. People participate in the game, essentially pursuing truth, with the goal of earning returns.
Q: Currently, a large number of users are trading sports events. What is the proportion of trading volume between sports and other categories among the platform's event contracts?
Indeed, everyone loves trading sports events. Most of our users enjoy mathematics, economics, and trading, and are passionate about thinking about probabilities and the various variables that influence event outcomes. Sports events are an excellent training ground for probabilistic thinking.
Q: What are the specific figures?
Last year, sports-related trading accounted for about 95%, and now it's close to two-thirds. There is a massive amount of sporting events every week, but political events don't appear endlessly. Sports trading brings ample liquidity to other categories like cryptocurrency, politics, and macroeconomics, driving significantly higher growth rates in those sectors.
Q: How is the political category developing now?
Major political events can reach a market size of $50 million to $100 million. As more participants join, the accuracy of market pricing improves significantly, and expectations become more aligned with reality.
Q: Returning to the topic of "financialization of everything," what are Kalshi's next steps?
Everything should be done in moderation. Kalshi supports sensible regulation. We have always insisted on a compliant path. In the early days of the startup, we spent years planning which categories to launch and fighting for federal-level licenses. It was very difficult. We were only 22 then, and the first four years of our careers were spent working with lawyers to push for a regulatory framework for the industry.
Q: Are you satisfied with the current regulatory environment? Are there any gaps in the regulatory system?
Whenever there is innovation and emerging things, there will be regulatory gaps at any given time. If regulations were perfect, no new things would be born in this country.
Q: I'd like to ask about the rumors of tension between you and Polymarket founder Shayne Coplan. Care to share what's really going on?
People always love to see rivals clash. But this isn't exactly direct competition. My true rivals are others: Robinhood, the Chicago Mercantile Exchange (CME), Coinbase, Interactive Brokers, major banks, and Zuckerberg who is eyeing the prediction market space. Competing on the same stage as these players excites me.
Our disagreement with Polymarket is essentially a difference in philosophy.
Q: What is the specific disagreement?
The core difference lies in the development path. Choosing compliant operation versus unregulated, wild growth. I believe Polymarket has not built adequate market risk controls. In the long run, this is not good for them, or even for the entire industry.
Q: How can you convince the outside world that the regulatory rules Kalshi is helping to establish truly side with user interests?
The industry's continued growth itself is a proof of trust; users are willing to entrust us with their funds. If people's interests are harmed, they lose trust in the platform, they will naturally stop using it and warn those around them.
Q: Is the platform's trading volume highly concentrated in the hands of a few traders?
I don't have precise percentage data, but the distribution of trading volume is indeed uneven. Some users trade sporadically each month, some treat trading as a hobby or side job, and there are also full-time participants, the super forecasters. Super forecasters sift through vast amounts of information. This group may be less than 2% of users but contributes 70% to 80% of the trading volume.
Our most accurate inflation forecaster is just an ordinary person in Kansas; the top ten political forecasters also come from all walks of life, without Wall Street elite backgrounds. Many are blue-collar workers, which is quite interesting.
Q: What measures does Kalshi take to prevent insider trading?
First, all users need to complete identity verification. The platform knows the real identity of traders, and if abnormal trading occurs, it can be quickly traced back to the source. Second, we have built systems comparable to the NYSE that automatically flag suspicious trading patterns. Third, we implement full transparency; all trading data is publicly available.
This has pros and cons. The downside is that everyone can see the trading records. If there's any anomaly, someone will immediately question insider trading. The upside lies precisely in that: abnormal behavior is supervised by everyone. If someone wants to engage in insider trading, it's like committing a crime in plain sight of the public.
Insider trading is subtle. In a sense, insider information can make market prices more efficient. But we strictly prohibit insider trading because it undermines fairness and will ultimately drive away ordinary traders.
Some economists argue that insider trading can improve prediction accuracy, making people trust market conclusions more. But fairness is our bottom line and top priority.
Q: The company is expanding rapidly. How do you balance external affairs while focusing on building the company?
Luana and I work very intensely, often working on weekends; time can always be squeezed out. When business reaches a stable phase, many tasks can be standardized and handed over to the team. She handles internal company operations, and I mainly deal with external affairs. This model works quite well.
Kalshi adopts a highly flat organizational structure, aiding efficient project execution. There are very few management layers, preventing managers from taking credit for frontline employees' work. The doers are the team leaders, thereby creating a sense of urgency and intrinsic motivation.
Q: Where does your management style come from?
Lebanese people generally possess an extremely strong ability to adapt; the local environment is full of uncertainty. That upbringing made me realize that the world itself is full of variables.
Right now, the AI field changes almost every two weeks, and the environment is in constant flux. Corporate organizational structures must adapt to this pace. Therefore, we deliberately avoid rigid hierarchical structures. Whether facing major challenges or new opportunities, teams can flexibly reorganize and collaborate.
Q: Continuing on the topic of upbringing, what is the most important advice your parents gave you?
My mother always told me: always give 120% effort, strive for excellence. The final difference in results often lies in that last 20% of effort.
Lightning Round
Q: Which recent trade on Kalshi caught your attention?
A: Contracts related to compute pricing.
Q: When interviewing job candidates, what's your favorite question to ask?
A: What do you think of Elon Musk?
Q: What is your most contrarian view?
A: I believe the success of any great enterprise does not primarily depend on its senior executives.
Q: Do you consider yourself a manager?
A: No, I'm not good at managing others.
Q: What was the last question you asked AI?
A: I asked ChatGPT about the probability of winning the 2028 midterm elections. Nowadays, AI can already pull Kalshi data for analysis.
Q: What is the worst advice young entrepreneurs most often hear nowadays?
A: Many people advise entrepreneurs to gather all sorts of advice from everywhere. But there is no universal formula for entrepreneurship. People over-rely on others' opinions; meanwhile, many people enjoy giving advice to others to feel superior, but most of the advice is worthless.
Q: Then what advice would you give to young entrepreneurs?
A: Don't take my words as gospel truth. Within controllable bounds, be as bold as possible in experimenting and taking risks.
Q: The best advice about meetings?
A: If you can avoid a meeting, avoid it.
