No Priors Ep. 88 | With Founder & CEO of Kalshi Tarek Mansour

In this week’s episode of No Priors, Sarah sits down with Tarek Mansour, CEO of Kalshi—the first CFTC-regulated prediction market exchange in the U.S. They dive into Kalshi’s recent victory to legalize election betting, explore ethical questions around trading on elections, and discuss whether prediction markets can offer more accuracy than traditional polls. Tarek shares insights on the history of futures markets, the line between gambling and financial trading, and the psychology behind betting. Plus, Sarah makes a live election bet, and Tarek reveals some of Kalshi’s most intriguing markets. Sign up for new podcasts every week. Email feedback to show@no-priors.com Follow us on Twitter: @NoPriorsPod | @Saranormous | @EladGil | @MansourTarek Show Notes: 0:00 Introduction 1:22 Sarah makes a live election bet on Kalshi 3:35 Getting approved and regulated by CFTC 5:48 Going up against the CFTC to legalize election betting 7:21 Debating the ethics of trading on elections 8:12 Gambling vs. trading 9:12 Context and purpose of futures markets 12:38 The human psychology behind speculating /Humans conditioned to risk taking 17:17 Building a healthy exchange and scaling liquidity 19:30 Introducing leverage and working with clearinghouses 22:29 Polls vs. prediction markets 24:59 Conditional markets 26:38 What makes Kalshi’s markets accurate 31:29 Tarek’s insights on the most interesting trades and markets on the platform

Sarah GuohostTarek Mansourguest

Oct 30, 202435mWatch on YouTube ↗

WHAT IT’S REALLY ABOUT

Regulated prediction markets reshape risk, forecasting, and election betting in America

Sarah Guo interviews Kalshi CEO Tarek Mansour about building the first fully CFTC-regulated U.S. prediction market exchange, now legally offering trading on U.S. elections for the first time in a century. Mansour explains how event contracts differ from traditional financial instruments, arguing they enable socially useful risk transfer and superior forecasting rather than mere gambling. They discuss Kalshi’s multiyear regulatory battle with the CFTC, market design challenges like liquidity and leverage, and the information-aggregation power of markets versus polls and experts. The conversation also explores future features like conditional markets, use cases from weather to inflation, and how prediction markets could become a major pillar of the financial system.

IDEAS WORTH REMEMBERING

5 ideas

Prediction markets turn real-world events into tradable, hedgeable risk.

Kalshi lets users buy yes/no contracts on events like elections, weather, regulation, or macro data, enabling both speculation and hedging against real economic exposures (e.g., a crypto company hedging election outcomes).

Regulation is essential for prediction markets to scale and be trusted.

Mansour argues no major financial market has grown large without robust regulation; Kalshi spent years co-writing rules with the CFTC to become the first fully legal U.S. event-exchange, including a lawsuit to win approval for election markets.

Event trading is economically distinct from pure gambling.

He differentiates socially useful risk transfer (hedging actual exposures like policy, weather, or economic data) from recreational games like roulette, noting that speculation is necessary for liquidity but doesn’t negate underlying economic value.

Prices in prediction markets encode probabilities and aggregate dispersed information.

Kalshi’s prices directly reflect crowd-assessed probabilities (e.g., Trump at 55% odds), often outperforming expert surveys and polls on topics like inflation, Fed decisions, and even daily weather by incentivizing anyone with information to trade it in.

People routinely misinterpret odds and conflate them with poll margins.

A 55% market probability is a slightly biased coin flip, not a 10-point polling lead; Mansour stresses that prediction market volatility around small poll changes reflects changing risk, not massive shifts in vote share.

WORDS WORTH SAVING

5 quotes

We’ve basically created a financial instrument where what you’re buying is not a stock or a bond, it’s whether an event is going to happen or not.

— Tarek Mansour

I have yet to see a financial market that has gone really big without being properly regulated.

— Tarek Mansour

It’s crazy to me to think that taking a position in the election is the same thing as betting on a dice roll.

— Tarek Mansour

Prediction markets are just pricing the odds… Trump now is more likely; it’s a coin flip, but it’s a biased coin flip.

— Tarek Mansour

Markets don’t lie. They don’t tell anyone what they want to hear. As long as people like making money and don’t like losing it, markets do a fair job.

— Tarek Mansour

What prediction markets are and how Kalshi’s event contracts workRegulatory journey with the CFTC and legalization of U.S. election marketsGambling vs. risk transfer and the social value of derivativesMarket design: liquidity, participants, leverage, and clearing housesPrediction markets versus polls and expert forecasts for elections and macro eventsInformation aggregation, accuracy, and examples (inflation, weather, TikTok, earthquakes)Future directions: conditional markets, user-generated markets, and institutional adoption

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