Original Title: Kalshi's C.E.O. Isn't Interested in Management Advice
Original Author: Jordyn Holman, The New York Times
Original Translator: Luffy, Foresight News
Kalshi is much smaller than many imagine. Most of its 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, along with prediction market platforms like Polymarket, is almost ubiquitous.
They are major sponsors of major sporting events, and media outlets frequently cite their data in reports on politics and financial markets. Users can bet on the probability of various events on these sites: the final score of a soccer match, the outcome of a new drug's clinical trials, what President Trump might mention in a speech.
Kalshi was founded in 2018 and opened to the public in 2021. The founders are two recent MIT graduates: CEO Tarek Mansour and COO Luana Lopes Lara. In May of this year, the company completed a new round of funding, valuing it at $220 billion. Mansour grew up in Lebanon, and Lopes Lara is from Brazil. According to Forbes estimates, both are in their early 30s and have already become billionaires.
In the United States, prediction markets are regulated by the Commodity Futures Trading Commission (CFTC) and can operate nationwide once approved. Gambling companies, however, need licenses state by state; the regulatory rules are different. A New York Times investigation found that the CFTC's recent staff reductions and relaxed enforcement have objectively boosted the growth of the prediction market industry.
The industry's rapid expansion has attracted numerous investors and new entrants, including individuals connected 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 is also showing interest in entering the prediction market space.
Some lawmakers and regulators believe prediction markets are just gambling disguised under a new coat of paint. The industry also faces insider trading risks: 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 illegal operations and evading state gambling laws. Kalshi called the lawsuit a "political stunt" and argued that individual states have no authority to shut down the company. More than ten states have introduced regulatory bills targeting prediction markets this year.
In its last funding disclosure, Kalshi stated 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) this "information-overloaded but truth-scarce" world.
The following is the interview content, edited and condensed for readability.
Tarek Mansour
Q: One of the visions you proposed for Kalshi is the "financialization of everything." Many see this concept as 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 politically polarized debates into a mathematical, objective system with clear and transparent incentives. If you research diligently, analyze rationally, and strive to find the truth, you are more likely to profit; if your views are biased, detached from reality, or extreme in stance, you are likely to lose money in the end.
This market has a unique sense of order: you can clearly discern the motivations behind others' views. People participate in the game, essentially chasing the truth, with the goal of making a profit.
Q: Currently, a large number of users participate in sports event trading. Among the platform's event contracts, what is the proportion of sports category trading volume compared to other categories?
Indeed, everyone loves trading sports events. Our users mostly love mathematics, economics, and trading; they enjoy thinking about probabilities and the various variables affecting event outcomes. Sports events are an excellent training ground for probabilistic thinking.
Q: Specific data?
Last year, sports-related trading accounted for about 95%, now it's close to two-thirds. There are countless sports events every week, but political events don't appear endlessly. Sports trading provides ample liquidity for other categories like cryptocurrency, politics, and macroeconomics, driving significant growth in those sectors.
Q: How is the political category developing currently?
Major political event markets can reach $50 to $100 million. As more participants join, the accuracy of market pricing improves significantly, with expectations aligning more closely with reality.
Q: Returning to the topic of "financialization of everything," what is Kalshi's next plan?
Everything should be done in moderation. Kalshi supports sensible regulation. We have always insisted on a compliant path. In the early stages of the startup, we spent years planning the categories to launch, obtaining federal-level licenses; the process was extremely difficult. We were only 22 then; 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 loopholes in the regulatory system?
Whenever there is innovation and emerging things, there will be regulatory gaps in any period. If regulation were perfect, nothing new would be born in this country.
Q: There are rumors about the tense relationship between you and Polymarket founder Shayne Coplan. Could you talk about the real situation?
People always love to see competitors pitted against each other. But this isn't direct competition. The rivals I truly value are others: Robinhood, CME, Coinbase, Interactive Brokers, major banks, and Zuckerberg who is eyeing the prediction market space. Competing with these players excites me.
The difference between us and Polymarket is essentially a clash of ideals.
Q: Specifically, what are the differences?
The core difference lies in the development path. Choosing compliant operation versus unregulated, wild growth. I don't think Polymarket has built a solid bottom line for market risk control. In the long run, this is not good for them, nor for the entire industry.
Q: How to make the outside world believe that the regulatory rules Kalshi advocates for truly stand on the side of user interests?
The industry's continuous growth is itself a proof of trust; users are willing to entrust their funds to us. If people's interests are harmed and they no longer trust the platform, they will naturally stop using it and warn others.
Q: Is the platform's trading volume highly concentrated in the hands of a few traders?
I don't have exact 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 massive amounts of information. This group may account for less than 2% of users but contributes 70% to 80% of the trading volume.
Our most accurate inflation predictor is just an ordinary person in Kansas; the top ten political predictors 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 identities of traders, allowing for quick tracing if abnormal trading occurs. Second, we have built a system comparable to the NYSE, automatically flagging 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; once any anomaly appears, people immediately question insider trading. The benefit is precisely this: abnormal behavior is monitored by everyone. If someone wants to engage in insider trading, it's like committing a crime in full view of everyone.
Insider trading is subtle. In a sense, insider information could make market prices more efficient. But we strictly prohibit it because it undermines fairness and will ultimately deter ordinary traders.
Some economists argue that insider trading can improve prediction accuracy, making people trust market conclusions more. But fairness is our priority and bottom line.
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 the business reaches a stable stage, many tasks can be standardized and handed over to the team. She is responsible for internal company operations, and I mainly handle external affairs. This model works well.
Kalshi adopts a highly flat organizational structure to facilitate efficient project execution. There are few management layers, preventing managers from taking credit for frontline employees' work. The doers are the team leaders, fostering a sense of urgency and intrinsic motivation.
Q: Where does your management style come from?
Lebanese people generally have a strong adaptability; the local environment is full of uncertainty. That upbringing made me realize the world itself is full of variables.
Right now, in the AI field, there are new changes almost every two weeks; the environment is changing rapidly. 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 your upbringing, what is the most important advice your parents gave you?
My mother always told me: always give 120% effort, strive to do your utmost. The difference in the final result often lies in that last 20% of effort.
Quick Q&A Session
Q: Which recent trade on Kalshi caught your attention?
A: Contracts related to computing power prices.
Q: When interviewing job candidates, what is your favorite question to ask?
A: What do you think of Elon Musk?
Q: What is your most contrarian view?
A: I think the success of any great enterprise does not fundamentally depend on its executives.
Q: Do you consider yourself a manager?
A: No, I'm not very good at managing people.
Q: What was the most recent question you asked an artificial intelligence?
A: I asked ChatGPT about the probability of winning the 2028 midterm elections; now AI can draw on Kalshi's data for analysis.
Q: What is the worst advice young entrepreneurs today most easily hear?
A: Many people advise entrepreneurs to collect all sorts of advice from everywhere. But there is no universal formula for entrepreneurship. People over-rely on others' opinions; meanwhile, many people love to give advice to others to feel superior, yet most of that advice is worthless.
Q: Then what kind of advice would you give to young entrepreneurs?
A: Don't take my words as gospel truth. Within the controllable range, be as bold as possible in experimenting and taking risks.
Q: The best advice about meetings?
A: Avoid meetings if you can.
