Written by: Jordyn Holman, The New York Times

Translated by: Luffy, Foresight News

Kalshi is much smaller than many people imagine. The company, with 200 employees, mostly operates in an open office in Manhattan's meatpacking district, not even occupying an entire floor of an office building.

But today, Kalshi, along with prediction market platforms like Polymarket, is almost everywhere.

They are major sponsors of various sports events, and media organizations frequently cite their data in political and financial market reports. Users can bet on the probabilities of various events happening on these websites: the final score of a soccer match, the results of new drug clinical trials, what topics will be mentioned in President Trump's speech.

Kalshi was founded in 2018 and opened to the public in 2021, founded by two recent graduates from MIT: CEO Tarek Mansour and COO Luana Lopes Lara. In May of this year, the company completed a new round of financing, achieving a valuation of $22 billion. Mansour grew up in Lebanon, while Lopes Lara is from Brazil. According to Forbes, both are just 30 years old and are already among the billionaires.

In the United States, prediction markets are regulated by the Commodity Futures Trading Commission (CFTC) and can operate nationwide once approved. Gambling companies, on the other hand, need to obtain individual state licenses, which are under different regulatory rules. A recent investigation by The New York Times showed that the CFTC has reduced staff and relaxed enforcement, objectively boosting the development of the prediction market industry.

The rapid expansion of the industry has attracted a large number of investors and newcomers, including individuals associated with the Trump family: Donald Trump Jr. is an investor in Polymarket and also serves as a paid advisor to Kalshi. Mark Zuckerberg of the metaverse platform Meta is also looking to get into the prediction market space.

Some lawmakers and regulatory agencies believe that prediction markets are just a form of gambling with a different facade. 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 Polymarket regarding related events; a White House teleprompter operator also placed bets on Kalshi about the content of Trump’s speeches.

New York State Attorney General Letitia James recently sued Kalshi, accusing it of illegal operations and circumventing state gambling laws. Kalshi claims that the lawsuit is merely "political posturing" and asserts that states have no right to order the company to cease operations. This year, over ten states have introduced regulatory bills targeting prediction markets.

In the latest funding disclosure, Kalshi reported that its platform's annualized trading volume soared to $178 billion. Mansour believes that a market allowing people to use money to back their own predictions has significant value, helping to "calibrate" (a term he often uses) this "information-overloaded but truth-deficient" world.

The following is the content of the interview, edited for clarity and readability.

Tarek Mansour

Question: One of the visions you’ve proposed for Kalshi is "the financialization of everything," which many consider dystopian. Why do you think this is a good thing?

I think people have taken this phrase out of context. The charm of prediction markets lies in their ability to transform subjective, emotional, and partisan disputes into a mathematical and objective system with clear and transparent incentives. If you conduct thorough research, analyze rationally, and seek the truth diligently, you are likely to profit; if your views are biased, out of touch with reality, and extreme, you are likely to lose money.

This market has a unique sense of order: you can clearly judge the motivations behind others' opinions. People participate in the game primarily to chase the truth, with the goal of earning profit.

Question: Currently, a large number of users are involved in sports event trading. What is the proportion of trading volumes between sports categories and other categories in the platform's event contracts?

Indeed, everyone is enthusiastic about trading sports events. Most of our users love math, economics, and trading, and are keen on considering probabilities and various variables influencing events. Sports events are an excellent training ground for probabilistic thinking.

Question: What are the specific figures?

Last year, sports-related trades accounted for about 95%, and now it's close to two-thirds. There are massive amounts of sports events every week, but political events don't continuously appear. Sports trading provides ample liquidity for other categories like cryptocurrency, politics, and macroeconomics, significantly boosting their growth.

Question: How is the political category developing at the moment?

The market size for major political events can reach $50 million to $100 million. As the number of participants increases, the accuracy of market pricing improves significantly, and expectations align more closely with reality.

Question: Returning to the topic of "the financialization of everything," what are Kalshi's next plans?

Everything must have moderation. Kalshi supports reasonable regulation. We have always adhered to a compliant path. In the early days of our startup, we spent years planning the listing categories and seeking federal licensing, and it was a very difficult process. At that time, we were only 22 years old, and for the first four years of our careers, we worked with lawyers to push for the establishment of a regulatory framework in the industry.

Question: Are you satisfied with the current regulatory environment? Are there loopholes in the regulatory system?

As long as there are innovations and new things, there will always be gaps in regulation. If regulation were perfect, new things wouldn't emerge in this country.

Question: I want to ask you about the rumors of a tense relationship with Polymarket founder Shayne Coplan; feel free to discuss the real situation.

People are always interested in seeing rivals among peers. But this doesn't really count as direct competition. The opponents I truly value are others: Robinhood, the Chicago Mercantile Exchange (CME), Coinbase, Interactive Brokers, major banks, and Zuckerberg, who is also paying attention to the prediction market space. Competing alongside these players excites me.

The differences between us and Polymarket fundamentally lie in ideological disagreements.

Question: What are the specific disagreements?

The core disagreement is in development direction. Choosing compliant operation versus uncontrolled, wild growth. I believe Polymarket has not built a complete market risk control baseline, which is ultimately detrimental to themselves and the entire industry in the long run.

Question: How can you convince the outside world that the regulatory rules established by Kalshi truly prioritize user interests?

The continuous growth of the industry itself is a proof of trust; users are willing to entrust their funds to us. If their interests were compromised or they lost trust in the platform, they would naturally stop using it and warn those around them.

Question: Is platform trading volume highly concentrated among a few traders?

I don’t have precise percentage data, but the distribution of trading volume is indeed uneven. Some users engage in sporadic trading each month, treating trading as a hobby or side job, while there are full-time participants, known as super forecasters. Super forecasters sift through vast amounts of information. This group may constitute less than 2%, yet they account for 70% to 80% of the trading volume.

Our most accurate inflation forecaster is just an ordinary person from Kansas; the top ten political forecasters also come from various fields without elite Wall Street backgrounds, many of whom are blue-collar workers, which is quite interesting.

Question: What measures does Kalshi take to prevent insider trading?

First, all users must complete identity verification; the platform knows the real identities of traders and can quickly trace back any anomalous trading. Second, we have established a system comparable to the New York Stock Exchange that automatically marks suspicious trading patterns. Third, we implement a full transparency mechanism where all trading data is publicly available.

There are pros and cons to this matter. The downside is that everyone can see the trading records; if any irregularity occurs, there will immediately be questions about insider trading. The benefit lies precisely in this: aberrant behavior is monitored by everyone. If someone intends to engage in insider trading, it’s akin to committing a crime in front of everyone.

Insider trading is very subtle. In a sense, insider information can make market prices more efficient. However, we firmly prohibit insider trading because it undermines fairness and ultimately deters ordinary traders.

Some economists argue that insider trading can enhance prediction accuracy and thus make everyone more trusting of market conclusions. But fairness is our priority consideration and bottom line.

Question: The company's expansion speed is rapid. How do you balance external affairs while focusing on company building?

Luana and I have an intense work routine and often work weekends; time can always be squeezed out. When the business reaches a stable stage, many matters can form standardized processes for the team to take over. She is responsible for internal operations, while I mainly handle external affairs, and this model works well.

Kalshi employs a highly flat structure, facilitating efficient project advancement. There are very few management levels, preventing managers from monopolizing the achievements of frontline employees. Doers are team leaders, thus creating urgency and internal motivation.

Question: Where does your management style come from?

Lebanese people generally have a strong adaptability, as the local environment is full of uncertainties. This experience has made me realize that the world itself is full of variables.

Currently, the field of artificial intelligence is experiencing new changes almost every two weeks; the environment is ever-changing. Corporate organizational structures must adapt to this rhythm. Therefore, we deliberately avoid rigid hierarchical structures. Whether facing major challenges or new opportunities, the team can be flexibly reorganized and collaborate.

Question: Continuing on the topic of upbringing, what is the most important advice your parents gave you?

My mother always told me: always put in 120% effort and strive for excellence. The difference in final results often lies in that last 20% of effort.

Quick Q&A session

Question: What recent trade on Kalshi has caught your attention?

Answer: Contracts related to the price of computing power.

Question: What is your favorite question to ask job candidates during interviews?

Answer: What do you think about Elon Musk?

Question: What is your most contrarian viewpoint?

Answer: I believe the success of any great company does not fundamentally depend on the executives.

Question: Do you consider yourself a manager?

Answer: No, I am not good at managing others.

Question: What is the most recent question you asked artificial intelligence?

Answer: I asked ChatGPT about the probability of the Democratic Party winning the 2028 midterm elections; AI can now retrieve Kalshi's data for inference.

Question: What is the worst advice young entrepreneurs are most likely to hear nowadays?

Answer: Many people will advise entrepreneurs to collect various suggestions everywhere. But there is no universal formula for entrepreneurship. People overly rely on others' opinions; at the same time, many people enjoy pointing things out to others to gain a sense of superiority, but most advice lacks value.

Question: What advice would you give to young entrepreneurs?

Answer: Don't take my words as absolute truth. Within a controllable range, try to experiment boldly and take risks.

Question: Regarding meetings, what is the best advice?

Answer: If a meeting can be avoided, then avoid it.

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