No Priors Ep. 88 | With Founder & CEO of Kalshi Tarek Mansour
Sarah Guo (host), Tarek Mansour (guest)
In this episode of No Priors, featuring Sarah Guo and Tarek Mansour, No Priors Ep. 88 | With Founder & CEO of Kalshi Tarek Mansour explores 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.
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.
Key Takeaways
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. ...
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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. ...
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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.
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Prices in prediction markets encode probabilities and aggregate dispersed information.
Kalshi’s prices directly reflect crowd-assessed probabilities (e. ...
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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.
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Market design must balance growth with systemic risk, especially around leverage.
While leverage can boost trading and liquidity, it introduces credit and default risk; as an owner of a U. ...
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Conditional and user-suggested markets will broaden prediction markets’ impact.
Kalshi can now list new markets in about 24 hours, half originating from user proposals, and plans to add conditional markets (e. ...
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Notable 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
Questions Answered in This Episode
Under what conditions could prediction markets meaningfully influence, rather than merely reflect, political or economic outcomes?
Sarah Guo interviews Kalshi CEO Tarek Mansour about building the first fully CFTC-regulated U. ...
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How should regulators balance protecting unsophisticated users from leverage and loss with preserving open access to prediction markets?
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In which domains (e.g., climate, AI timelines, geopolitics) might prediction markets deliver the greatest social value beyond existing forecasting methods?
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How might conditional prediction markets change how policymakers, investors, or voters think about the consequences of different decisions or candidates?
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What ethical safeguards, if any, should exist around markets on sensitive events like wars, pandemics, or natural disasters?
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Transcript Preview
(instrumental music plays) Hi, listeners, and welcome back to No Priors. Today, I'll be talking with Tarek Mansour, co-founder and CEO of Kalshi. Kalshi is a recently CFTC-regulated prediction market exchange that's changing how people forecast future events, like the upcoming US election, the weather, the date of arrival of AGI, and the jobs report. Tarek started Kalshi after studying at MIT and working at Citadel and Palantir. We'll discuss what a prediction market is, if it's a threat to democracy, building a regulated exchange, and how Kalshi fits into the broader financial ecosystem. Welcome, Tarek.
Great seeing you, Sarah. Thanks for having me.
This is going to be a super exciting, um, small number of weeks before the election. Can you please explain to anybody who hasn't been on it yet, what is Kalshi?
Kalshi is actually the first legal platform in the US where you can basically bet yes/no on any future questions. The thing that's really cool is like, we've basically created a financial instrument where the thing that you're actually buying, or selling, or trading, or betting on is not a stock, it's not a bond, it's not a commodity like oil. It's something more intangible. It's actually whether an event is going to happen or not. So on Kalshi, you can basically buy shares of whether it's going to rain tomorrow, whether TikTok is going to get banned, whether Eric Adams is going to get fired as New York mayor, or whether Donald Trump is going to win the next election.
Okay, cool. I feel like the easiest, uh, way to get a sense is like let's make a trade. I'm going to share my screen. Okay, here I am. You got Kalshi?
Yes, this is kalshi.com/elections. This is actually our live election forecast page. Uh, you see- you can see that Trump is up, uh, 55-45 right now, uh, and 19 days left. So we'll see how that evolves. Um, you can go... Yeah, you cl- I think you're clicking. So this is the election market, uh, I- I'm actually going to let you figure it out.
No, no, no. I- I understand here. Uh, I think, uh, you know, Trump at 55%. That feels underpriced to me. Let's go in on it. $267. Oh, I got, I have $150 in cash so I'm going to go all in on this. It feels, it feels like a trade I want to make. Um, uh, let's see, what happens? Market closes when the outcome occurs. Two hours after closing. I'm ready. Did that just happen? (laughs)
Yeah, it's done.
Oh, wow. Okay. Wow, you're gonna bankrupt me. This is too easy.
Yeah, I mean, it's- it's pretty cool, right? So I think, like, the cool thing about this is, like, you can actually also sell it before... So if you click on Donald Trump right now, you can see your position, um-
Mm-hmm.
Uh, or on the... Yeah, right here, and then you can see your position and you can actually exit it if you want to. So you can sell at 55 if you wanted to.
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