Tarek Mansour believes deeply in prediction markets — or so he tells me again and again. He says they will, variously, play the role of modern oracle, innovative asset, public educator, new journalism and political saviour. At the moment, however, most of the money flowing through them is gambling on American football.
“We’re making the world a little bit smarter about the future, and I think that’s a very valuable thing to build,” Mansour says. “It’s not something that you should take as the Holy Grail truth, but it’s better than the alternatives.”
Mansour is a co-founder and chief executive of prediction market Kalshi, the largest such platform operating in the US. He has chosen to meet me at Serafina, one of a small chain of Italian restaurants, in Manhattan’s Meatpacking District because it is close to Kalshi’s offices and rarely crowded. The sky above New York is a threatening grey, and Kalshi traders are forecasting a 74 per cent chance of rain.
Serafina is empty and, in fact, locked when I arrive at our appointed 11.30am. The waiter unbolts the heavy door and shows me to a corner table at a plush banquette. The walls are of rough brick and the floors unfinished wood. There are a few other small tables and a large bar. A radiant portrait of a woman decorates one wall. The waiter, Angel, turns on dance music that blares just for the two of us.
Mansour, 29, arrives a couple of minutes later, wearing a cream-coloured hoodie and thick glasses, lenses slightly tinted. His hair is dark and curly and falls over one side of his forehead. He is unshaven and says he hasn’t been sleeping well.
“When people talk about, ‘We believe in markets,’ what do they actually believe?” Mansour says. “What it means is that you believe that they’re a good way to figure out what the price of something is . . . And in this case, we’re pricing the future.”
The idea behind prediction markets such as Kalshi is simple and powerful. Participants trade shares of some future event (for example, will it rain in New York today?). The shares are redeemable for $1 if the event occurs and $0 if it does not. Beforehand, the price (74 cents, say) can therefore be read as a probability of the event occurring (74 per cent). Thus in theory, if large and liquid, these markets quantify and broadcast the “wisdom of the crowd”.
Recent venture capital investment values Kalshi at $11bn, turning its two founders into paper billionaires. The other, Luana Lopes Lara, is said by Forbes to be the world’s youngest self-made woman billionaire. Mansour and Lopes Lara met as part of a clique of international undergraduates studying computer science and maths at MIT — he grew up in Lebanon and she in Brazil — and they began their careers at investment banks and hedge funds.
As we peruse our large menus, Mansour unwinds an origin story. In 2016, when he was working at Goldman Sachs, business was being written on Brexit and the election of Donald Trump. His desk peddled a so-called Trump trade in the form of a calendar spread, in effect a short on the S&P 500 timed to the week of the election. Mansour was bemused by its complexity and its exclusivity — surely not only Goldman customers had opinions about Brexit and Trump? Over at Bridgewater Associates, where Lopes Lara worked, a research division investigated the future while an execution division figured out how to trade it, a cleavage that Mansour thought was “really weird”.
“You have a financial market to price companies, you have one for physical commodities, for intangible commodities like rates and credit and currencies,” he says. “What if you built one for pricing simple questions about the future?”
Mansour is neither the first to ask this question nor the first to answer it. Here in Manhattan, they’ve been trading on elections since George Washington was on the ballot. In an era before scientific polling, election prices were remarkably accurate and reported daily in major newspapers. More recently, the Iowa Electronic Market was launched ahead of the 1988 US presidential election, and PredictIt opened in 2014, offering a menu of political markets. But these were small, formally academic endeavours that operated with special and limited permission.
Mansour and his colleagues were the first to do it at commercial scale in the US. Their great triumph has been a legal one: victory in court over the Commodity Futures Trading Commission (CFTC). There is language deep inside US federal regulations — 17 CFR 40.11 — that prohibits event contracts on terrorism, assassination, war and “gaming”. The entire predictive project teeters on that word.
In October 2024, the federal court of appeals for the District of Columbia agreed that “gaming” must refer to the “act of playing a game”, and that elections aren’t games. The ruling came just in time for the US elections. Some $535mn worth of shares were traded in Kalshi’s main presidential market, which pegged Trump as a slight favourite. At present, for the 2028 presidential election, vice-president JD Vance is trading at 27 cents, California governor Gavin Newsom at 20 cents, and a menu of others further behind.
Taking a victory lap this December, Mansour tweeted of prediction markets that he “overcame the government to set them free”. Kalshi is now blessed by the CFTC as a “designated contract market”, one of about two dozen that include the Chicago Mercantile Exchange, Coinbase and Crypto.com. And for the past year, Donald Trump Jr, the president’s son, has been an adviser to Kalshi. “He’s been extremely useful,” Mansour says.
But not all elements of the government consider themselves overcome. Kalshi has received cease-and-desist letters from the states of Arizona, Connecticut, Maryland, Nevada, New Jersey, New York, Ohio and Tennessee, and is being sued by Massachusetts and Native American tribal groups. These parties mostly argue some version of the same thing: that Kalshi is operating as an illegal sportsbook.
“We’re confident in the law,” Mansour says, nursing a water as we wait to order. “When you get a cease-and-desist, it’s usually, like, you go into hiding if you’re doing something wrong. We’re not.” Kalshi is suing some of the letter writers, and contends that its regulation by the CFTC supersedes the states, and that the prohibition against gaming is something only the CFTC may enforce, and it has chosen not to.
Mansour also lays the argument back at the feet of his critics, comparing his situation to that once faced by Uber or Airbnb. “When these technologies get mass consumer adoption, there is a set of critics somewhere,” he says. “And usually the arguments that they put forth are around policy, or why this is unsafe — but this is not really why they’re criticising the thing. It’s an economic incentive, first and foremost. In our case, the casino lobby or the sportsbook lobby, their incentives are threatened, or they feel like their profits might be threatened, so they’re worried about this sort of disruption.” He says none of that troubles the “foundational legal arguments”.
The week after our lunch, a Massachusetts judge bars Kalshi from offering sports markets in the state, on public health and safety grounds.
Menu
Serafina
7 Ninth Ave, New York 10014
Penne all’arrabbiata $22
Chicken breast paillard $27
Coca-Cola $4
Total (inc tax and tip) $70.96
“This is fun,” Mansour adds amid my questions, and not for the last time. A chattering lunch crowd begins to occupy the tables nearby.
In a widely circulated clip from a finance conference last year, Mansour says that “the long-term vision is to financialise everything, and create a tradeable asset out of any difference in opinion”. Hence “Kalshi” — the name derives from “everything” in Arabic. “Some of it could be the future of, like, climate change and the future of our politics, and others can be, like, sports because a lot of people care about that,” Mansour tells me.
Yet only a vanishingly narrow slice of the world’s interesting questions have yes-or-no answers. And even those can slip into headachy epistemological mazes. For example, did the US “invade” Venezuela when it killed military and security personnel and snatched its president? Polymarket, Kalshi’s offshore rival, ruled that it had not, and one trader complained that the site had “descended into sheer arbitrariness”.
Mansour says now that the video clip was taken out of context, and admits that the word “financialise” is “daunting”. He tells a story about the early days of butter futures. “People would come in and say, ‘Well, this should be butter,’ and started debating about the saturation and how much salt. What is butter exactly?”
Regardless of what butter is, or what an invasion is, Mansour believes that the nation can be saved by binary options. “We’re making incredibly important decisions about the future of our country in a very subjective, polarised, very heated, charged way,” he says. “My mental model of this is: Everything is 0 or 100 per cent these days, either you’re 0 per cent or 100 per cent, but the right answer is probably, like, 45 per cent.”
He continues: “The noise-to-signal ratio is going up, it’s very hard to know what information you should trust and from where, polarisation is at an all-time high and it keeps increasing — and there hasn’t been a really clean solution to this. And I think the neat thing about prediction markets . . . ”
“Do you guys need more time, or are you ready?”
We’ve already pestered Angel twice, having asked him to please lower the music. I order penne all’arrabbiata.
“I’ll get the chicken,” Mansour says.
“Chicken,” says Angel. “Which chicken?”
They consult and discern that it is the chicken paillard that they’re after. Mansour sticks with tap water and I get a Coke.
Mansour is an inveterate gesticulator. Categorical boxes and arrows between them are assembled in local airspace, where he draws his vision of the world. In this manner, he picks up where he’d left off.
“The critical thing here is you have two pillars: you have the wisdom of the crowds, and you have skin in the game,” Mansour says. “The incentive is so clean and pure. When somebody goes on Twitter and says something, you have to dig into what their incentive is, whereas in prediction markets, the incentive is so clear — this person is trying to make money.”
Still, it is easy to imagine incentives on prediction markets that are neither clean nor pure. Insider trading is an ever-present possibility. If his markets’ “unbiased data” becomes “embedded in the fabric of culture”, as Mansour hopes, they become a manipulable signal of public consensus. Market outcomes could legitimise contested actions, and forecasts could become prescriptions.
But for now it’s sports betting. The Sunday before our lunch had been the busiest trading day in Kalshi’s history by some margin, with $414mn of volume. It is the crescendo of football season in the US. Of the busiest 100 markets that day, 91 concerned sporting events. Roughly 90 per cent of all the fees that Kalshi has ever collected have been thanks to sports, according to an analysis by the Financial Times.
Football season is nearly over. Mansour says he isn’t worried. He’ll just “figure out what people are talking about and make sure that the markets are listed”. In addition to politics and sports, Kalshi hosts a selection of what might be called cultural markets — in other interviews, Mansour has been quick to mention Taylor Swift — including at the moment on the Oscars, existence of aliens, Epstein files, and whims of the unknowable mind of Donald Trump.
There is, in this assembly of markets, some overlap with the practice of journalism — a detection of what’s important and the seeking of truth thereabout. On CNBC, as I write this in our newsroom, they are broadcasting Kalshi prices on the next Fed chair. On CNN, the network’s chief data analyst points at a screen displaying Kalshi prices, including recently from a market on whether Trump would take over part or all of Greenland, trading as I write at 47 cents. Is 47 per cent accurate? Who could ever know?
Some at Kalshi see opportunity in a diminishing news media. “Kalshi is trying to be a newspaper in a world of op-eds,” co-founder Lopes Lara told The Free Press recently, arguing that “no better mechanism” exists than markets to inform people. Mansour, speaking to this newspaper, accepts some division of labour. He foresees “a symbiosis” between journalists and markets, each feeding into the other, a new information machine.
Our food arrives and we Tetris the large platters on to the small tabletop amid phones and a notebook. “I really like chicken and I really like thin chicken,” Mansour says. He’s certainly got it, poultry pounded into crêpe with serious acreage, beneath a sea of arugula and tomato salad. “I like steak a little bit better, but I can’t eat steak every day.”
My pasta is well cooked and satisfying, served in a monstrous portion, oily and spicy. I cough while trying to ask my next question, and the Coke becomes utilitarian.
I wonder out loud if Mansour worries about the world turning into a casino. “Define casino,” he says. I gesture broadly. Betting on a dice roll is one thing, Mansour says, betting on climate change is another. “You have to be informed. It’s not the same as walking into a casino and clicking on slot machines.”
Aesthetically, at least, Kalshi comes fairly close to replicating a slot machine with its 15-minute markets on whether Bitcoin will go up or down, complete with gold coin and spinning numbers. In any case, for Mansour, one exculpatory difference is the lack of a “house” in prediction markets. “Prediction markets don’t make money off somebody’s losses, they make money off somebody’s engagement,” he says.
As I fight with my pasta, I notice on Mansour’s phone wallpaper a sword-wielding character. This is Tanjiro Kamado, he explains, the protagonist of an anime series called Demon Slayer. Tanjiro is an aspirational figure for Mansour.
“Japanese culture has a lot of strong, moral things,” he says. “A lot of the heroes revolve around two things. Continuous self-improvement for the sake of it — the heroes always have people around them who are jealous of them, but they are just focused on getting better. And two, just generally suffering, being able to intake a lot of suffering for a greater purpose.”
If Mansour is suffering, it has not affected his appetite; somewhere between the arm-waving and question-answering he has finished his chicken and cleaned his plate of everything but a lemon. I ask him how he enjoyed lunch.
“I like this chicken a lot, I really like this chicken,” he says. I have my own leftovers boxed up, and I wouldn’t finish them even with the second go.
We walk around the corner to Kalshi’s offices on West 13th Street, and up the stairs to a large open room. This building used to be a publishing house. The space is well populated but dim and dead silent, the many young attendants of the oracle staring at large monitors beneath expensive headphones. Mansour points out his teams: engineering, product, risk, growth, compliance. His desk is over there at the end of a long row. Framed images of CNN’s chief data analyst pointing at a screen hang on a wall.
“This was fun,” Mansour says.
Back outside, the sky is still ashen and a light wind blows from the east and the price of a Kalshi rain share rises to 86 cents. I risk walking the mile downtown back to the newsroom. It never does rain.
Oliver Roeder is the FT’s senior data journalist in the US
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