Odd Lots - Tarek Mansour on Kalshi's Plan to Create Markets in Everything

Episode Date: October 1, 2025

For over 20 years, people have been talking about prediction markets or event markets are the next big thing. But mostly, with some niche exceptions, they haven't taken off, in part due to regulatory constraints. But now they seem to be booming, and the regulatory environment has gotten much more friendly. On this live episode recorded in Chicago, we speak with Tarek Mansour, the co-founder and CEO of Kalshi, one of the prediction market platforms that's booming. One reason it's doing so well is because it's gone big into sports, which of course gets into its own regulatory thicket. In this conversation, we talk about the future of these markets, the prospect for markets other than sports and presidential elections, and Kalshi's overall plan to let its users to eventually trade everything.Only Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox — now delivered every weekday — plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlotsSee omnystudio.com/listener for privacy information.

Bloomberg Audio Studios, Podcasts, Radio News. Hello, Oddlaws, listeners, and viewers. You're about to get a conversation with Tarek, Mansoor, CEO of Kelshi. This was recorded live on stage at Chicago's Untitled Supper Club. We had a blast, and we hope you enjoyed the show. You're definitely having a moment. The South Park episode last night was all about prediction markets. Did you watch it live?

I try to avoid watching or reading anything about it. us without kind of getting the third party reaction before. Oh. So we didn't know because we saw the thing, like the announcement a few days ago, they're doing episode prediction markets. And we started kind of imagining all the types of things that they're going to do. It was crazy. I mean, the highlight, I think, is like, they copied the app.

Like, exactly. That was, I mean, they even had the referral board. They even had some of the bugs we have in the app. It's like, it was unbelievable. So, but, you know, it was pretty cool. I mean, there's a few bars that I disagree with. But the other, for the rest, I mean, we really enjoy. it. I watched it this morning.

Why do you think prediction markets are having this moment now? They've been around for decades, literally. Why now? Yeah, I mean, I think there's like path dependence in these things, right? Like, it's not sort of like, I'm a strong believer that sort of like, you know, in history, you have to have a few agents that sort of like push

and, you know, push the boundary of certain things and somebody's got to do it type thing. But my view on this and so why we started the company is the fundamentals are there. Like, this should be a very large market. And we could talk a little bit about the history, but when we first started the company, this idea of sort of like a financial market that prices questions about the future, sort of we were very drawn to it because, you know, one, if you could build such a financial market,

it could be the largest of them all because the largest number of people will care. And the number two is it could be the most important because, you know, yes, pricing the, you know, the share of Tesla is important, but pricing whether Brexit is going to happen or Trump's going to win an election or what's, you know, sort of the next natural disaster going to be, I think that's at least as important, if not more. At least from my perspective, I mean, when I looked at the history and you were chatting a little about the history, like, the elephant in the room was regulatory.

I mean, there's a very simple kind of like first order factor here. Well, it was illegal. Like, you know, that's a pretty good reason. Yeah, I mean, it's a pretty good reason for something not to, you know, generally kind of go mainstream and exist. And the legality has been sort of the thing that has weighed on all prior prediction markets. I don't know if you ever encountered in trade. Yeah, yeah. I, I traded on there. Well, you know, so here you go, right? I mean, Intrade was, you know how that story kind of

ended? How familiar are you? I don't know how it ended. So John Delaney was this, was a sort of founder of intrade and he's just kind of visionary. I mean, like Don in many ways, I mean, he really believed in the, you know, he was on CNBC back in 2000, sort of like talking about the forecast for the election and stuff. But he sort of ran offshore from Dublin and it was kind of like a VPN type set up and then the company got shut down in 2012 by the government and two weeks later John Laney died and he died climbed Mount Everest and there was a kind of whole controversy of like what happened I mean you know is there some sort of causation there but for us when we we got really obsessed by doing this and realized like actually the only way for this to go big

is you got to legalize it like there was no other way and and no matter how big the company would get no matter how kind of how much culture there was going to be around the company it didn't really matter because the government could shut it down and they will after a certain level of scale. And so this was sort of like we spent, you know, three years and a half when we started, after starting Kalshi, like all we did was basically regulatory work. It was like how do we legalize? Fight, exactly. The fight was actually like more like five years and a half, like three years and a half to get to legalize prediction markets and there was sort of the whole thing with the prior administration around the election market,

which we were completely uncompromising on. We had to do that. And, and, you know, and, that was kind of a whole two-year-long process that ended without suing the government, our own regulator and then, and then I think that lawsuit, I view it as sort of the probably what the turning point is for these markets. Like, this is when we won that, the institution, like, this is when everything changed. Would you have died if Trump hadn't won in November? No, it would have just been slower and harder, but no, not died. I mean, we didn't die under the harshest environment of all, I think.

Like, well, the first three years and a half was like, well, this was just not allowed, right? And we kept sort of making progress all the way up until legalizing and launching. But then, yeah, the reality is like the prior government, I think, was as hostile as it gets. It was just not, I mean, they just didn't want it to exist. Well, you say that, like, it's really important to have a change in the regulatory landscape, that there's no way this could have taken off had this change, had this not changed. However, there is a competitor that you can access via VPN, fund with stable coins. In theory, there doesn't even need to be a company that had been operating for several years.

Couldn't it have happened and could it still happen that the future of prediction markets is on-chain and essentially outside of the regulatory landscape? I don't necessarily think that on-chain, off-chain is sort of necessary kind of an unregulated, regulated, like on-chain doesn't mean illegal, right? Sure. Sure. So, but I think that like... But there's a lot of volume on this entity that had all kinds of things while you... Is that a polymerc? I'm talking about polymarket.

So it's not like we couldn't go on chain, right? It's like, this is not a very hard thing to build, right? And actually, like, it's funny. Like the first two weeks of cash, we tried to do something on chain and realized like, well, again, it was a good way to sort of be maybe like somewhat smart about regulation, but not really because auger was on chain also. And like, that was also sort of shut down and it was a bunch of issues. for us we stood very firmly that like for this to go mainstream well you should avoid a VPN you know but also like how do you have this be legitimized financial markets attract the type of institutions that would trade you have a bunch of institutional partners and now the brokers and actually truly take this

ministry it was just no no way to do it outside of the like this is the universe of financial markets you cannot do it outside you have to expand it and if you expand it then I think we have a real winner and I think the results show like you know yes Polly has a lot of volume but like there's not real revenue yet a lot of wash. Like, it's kind of, how do you account for all this stuff? And even if you account for all of that, today we're like something like three X bigger within a year. Definitely want to talk about the brokers and the market makers. But before we do, a very basic question, but often the basic questions are the most interesting.

Can you walk us through the life cycle of, you know, a binary event contract that gets created on your platform? It's a good question. Because that's a hard problem, right? Like, because in traditional markets, right, the life cycle is like, you know, we have an idea like grain futures or onion futures or GPU. Not a loan. No, not only features. Don't do onion futures. Onion futures is a bad idea.

It's really illegal. You can't. I do think it's a little lame that polymarket, like if it hasn't done onion futures, because if you're going to like, what's the point of on chain if you're not sticking it to the man. Anyway. If like the onion farmers are like finally having like instrument to head. What's the point of crypto if you're not using it to fight against these absurd rule? I mean, well, the Onion Future's rule is truly absurd. Yeah, yeah.

It's like, that's one of those. But I guess now it's maybe kind of funny. Maybe we should just keep it. But like, or like GPU, I mean, or like GPU future. I mean, like the point here is like you have something where the lifetime is infinite. You list the future and the derivative and it's sort of there forever. And then you build the liquidity over time. You can take your time and take it's like,

usually these things take time. They take years to kind of build up to market them and build equity. This is different, right? Like, this is much more dynamic. It comes and goes. Like, oftentimes the trend could be sort of like there for two to three weeks, sometimes a week, sometimes it's a day. And you have to be much more, much faster.

And kind of my mental model for what this looks like is sort of like there's an idea that can be from a user, from the news, from a trend, from some tweet. Then there's a listing of the market. And then there's kind of like from a listing to kind of making it reasonably liquid and active. So we've gone through like all kind of types of regulatory winters. But the first time we listed a market, it took us 18 months. That was just for listing. And because there's a lot, like operations attack, these are tickers, right? Like you list them like a stock or like a like WTI crude oil. Now we do it within 30 minutes. And so we've expanded

the territory quite a bit. And when you list it, does it go to the CFTC or what's the approval process? Yes, there's like a self-certification which basically you fight with the CFC and they kind of like generally, the historically is basically like if you file it and you haven't engaged with them beforehand, they usually will basically block it. They'll call you and say stop until we talk and then you do it. But now we've covered so much territory and we've built so much technology and like the operations and the regulator in the loop that like most new things that we do actually fit into a bucket that we've already done. And sometimes there are completely new things. Like right now the frontier is actually some of the SEC like company related markets. I think is the sort of next frontier. But we've covered so much grounds now that like most things are like of a similar flavor.

We've been going this whole time, you know, you talk about company related stuff, talk about hedging onion futures, maybe hedge or sorry, hedging onion prices. Maybe you want to strip out something related to Tesla car sales. But let's talk about the business. How much of this is sports right now? How big is the gap between volume on a Sunday versus volume on a Wednesday? there. Volume on a Sunday is very, very big.

But, like, it's interesting. I mean, like, I'll say a few things. Like, the sports side has grown, like, I mean, I'm shocked. I'm still shocked. Like, every week, we do a forecast and we beat it. And, like, you know, America likes NFL. I mean, I don't know. I mean, they like football.

I mean, they like football. I don't know. More than I expected, I guess. But it's a little bit more than that. Like, the thing about sports is, I'll say there's two things going on. One, there's just a lot of scheduled events. There's just a lot in the week. But if you compare like a one-to-one, like a game to like, basically anything that Trump does, Trump will win.

Like, you know, like in terms of volume one-to-one, like these markets do really, really well. And it could be literally unlike any, I mean, anything he does. The problem there is like there's not enough scheduled, like, events. I think there may be over time. But just like, what percentage is sports? On Sunday, like, it's not, I mean, probably 90% of sports on like a regular weekday. like much lower. And what's the gap in volume between?

Three X maybe. Okay. Okay. So like, yeah, I mean, NFL Sunday is like massive. But it's a little bit like, it's a little bit like asking the question like, okay, well, on election day, what was the volume? Yeah.

It's like 99.9% elections, right? So sports is very large, but like we have other categories now. Like culture, for example, I think is like growing at a similar rate. It's just not starting from much lower baseline. And our market diversity, our liquidity is just not there yet. Whereas sports is much more kind of like, I would say like much more diverse and much more liquid. Okay, so I'm going to ask the obvious question, I guess, but why is it not sports betting? You know, I don't have kind of like as much of the word betting. I think gambling

is sort of where I have a problem. I mean, you know, when like S&E launched water futures like three, four years ago, you know, I remember like the headline about that is like, oh, you can now bet on water. It's like, all right. I mean, I guess the word betting is used very sort of loosely, but like, I would say two things. There's sort of the legal question and there's sort of the ethical is this good for society question. And those are, it might be sure. We'll do both of the Don't worry. Yeah, I mean, I guess, so the legal question, I mean, like, our approach has always been sort of legal and regulate at first, like, always do it within the bounds and expand the bounds. So we did this prediction market, then elections.

You know, I mean, a year ago, right? Well, a year and a half. Well, a year ago even, like, I mean, people were saying this is going to destroy democracy, right? Like, it was the end of the world if we ever got legalized and, like, you know, and like it was, and then we got legalized and it was like super biased. And, you know, I was being accused of being Mossade agent. I don't remember that period. It was like, I missed that one. It was like a whole thing about, you know, I worked at Palantir and thus I'm obviously kind of rigging the election.

But like, and obviously the vibe has shifted pretty dramatically with the election and because, you know, there is some kind of powers these markets. So when it comes to sports, like on the legal piece, like it is legal. Like the CFTC could stop it if they wanted to, but the states can't. That's federal preemption and that's how it works. And we're extremely strong legal footing. I mean, Don was mentioning sort of this year. I don't think CFT is asleep at the wheel. like, you know, they have less staff, but they have staff.

And the staff is aware of sports. We talked about it. It's not like, we showed up one day. Like, hey, surprise, sports markets are here. Like, isn't Trump's nominee also on your board, the nominee for CFTC? Well, he was ex-nomony now. I mean, we'll see. But, I mean, I don't know. But I don't know if it's ex-nominy.

But like, there's a kind of questions. But I, it's kind of, he was not there when this happened. And like, he was, he's still not there, actually. So I don't think it's very relevant to the question. I think the change of the administration is relevant to the question. Like, yes, I mean, I think it would have been much more challenging in the prior administration. There's no question about that. But the law is pretty clear.

I mean, if you read the Commodities Exchange Act, there's like a two-prong test. And it's an event kind of related to war, terrorism, assassination, violence, or gaming. And then there's some sort of illegal stuff that's illegal under state or federal law. And so you can fall under that category. We could debate whether this falls under gaming or not. And there's actually quite a bit of debate there. And then the second test, which is like if it does fall under this category, the CFC can make an explicit determination that is contrary to public interest.

Right? So there is that sort of second standard. Yeah. Which brings me to second question, which is like, I'm just strong believer in markets. Like, I think a market-based model for these markets

is better than the over-the-counter sportsbook model because the odds are better. Anyone can be a price bitter. They don't have to be a price taker. And the results show, like, less people, like the percentage of people that basically lose on cash is closer to 50-50. It's just not the case in like a traditional sports book.

And I think that's the sort of argument that wins it long term, which is like, it's just better. Like, you get better prices, more transparency and the ability to, you know, influence, like basically participate in a way that you can't in a traditional model. You already said that you don't think that the distinction is not between trading and betting. The distinction is between betting and gambling. So you sort of preempted a question, but there is this Facebook ad that I saw, and it says, breaking news, sports betting in California is now legal.

And I saw a screenshot of it, but couldn't find it. I found it on a blog. But is that like an actual Kelshi ad that ran? Well, we have a very large marketing team and this ad is not there anymore. But like regardless, I mean that. So that was knowing. You got to imagine a company that's like grew 100 X overnight. No, I get, yeah, but like, you know, you're saying like breaking news.

Like, I guess what I'm saying is like, we all know what's going on. Well, the news is breaking. I mean, it is legal to trade on calcium in the office states. I mean, that's big news. Like, you know. Yeah. And we are literally, I mean, you know. So, but like, I do.

actually think like I'm not as worried about this like in some way like you know the word gambling is the one that really irks me like I think you know because like okay zero D T TTE options like like what retail is doing what like a trillion dollars of volume I mean you you probably know the numbers what is it day right now I can't remember but it's a lot yeah so what is retail doing there like hedging I mean right no what exactly are they doing they're gambling I don't know about that no I mean I think it's fun. Like, I agree with, like, this premise that the idea.

Well, draw the line is basically like, like, it's a sort of thing where, like, I mean, in 1905, I think we talked a little bit about this. Like, the Supreme Court, there was this whole question of grain futures. Like, should it be gambling or should it be a financial instrument? And if it was gambling, he was going to go under the bucket shop laws. And it was this sort of Supreme Court case, Chicago Board of Trade versus Christie, where Supreme Court basically, like, ruled in favor of the Chicago Board of Trade, which is like, yes, a lot of people are speculating.

But there's value to these markets beyond. on the actual speculative, you know, activity that's taking place. And then you get into the kind of question of like, what is the standard of the Commercy Exchange Act? Like, should all the activity be hedging? Well, if that's the case, then you, let's just cancel the whole act. Let's just stop trading altogether because in most markets, including grain futures, like 95% plus is not hedging. It's speculative. And I think that's true in the stock market.

And so, you know, and then like, okay, well, how do you distinguish and, you know, should we take out of the speculative and just keep the hedging? Well, if you do that, then there's no liquidity. so it doesn't work. And then how do you even know who's hedging and speculating? Do you go and check the person to finance? So you go into all these different questions, but like, to me, gambling is sort of like, you create an artificial risk and then you roll a dice and then you gamble on it. You know, trading on whether Brexit had happened or not, that's just like a natural risk that's sort of there.

And then the second question is that, and to me, the even more important one is like the market based mechanism versus sort of like you walk into a casino, the odds are like structurally stacked against you. And actually, if you start making money, they, like, in the best case scenario, they basically, you know, stop you from participating. And that happens in sports books and others. And the worst case scenario, they, like, kneecap you, right? Like, they, and so that to me is gambling. Like, it's like the revenue of the company is equal to the losses of its customer and vice versa. I just don't think this is the same here. Like, that's not how the New York Stocksheen makes its money. It makes its money based on fees. Same with Robin Hood. Same with, you know,

same with Cal She. And so I think there's a big structural difference. Well, this was a, going to be my next question, actually. So setting aside the gambling terminology, part of your argument here is that even if it is betting, it is somehow qualitatively different than traditional betting where, you know, you have a sports bookmaker who's setting all the prices. And you said earlier that there is more transparency and fairer pricing and all of that. But then, again, if you look at some of the words that your own company has used to describe this, you put up job advertisements saying that you need experts in something similar to sports book pricing. No, that's not quite right.

No. The job is the sports operations listing the markets, how to settle them in all these different things. That dynamic is similar, right? Like you have to know which markets to list, how to list them. What are the price feeds to kind of like pull up, to pull to basically settle, whether it's sort of like this team one versus the other. That's very different from like, you know, we need, I don't know, like someone who is like an expert and like, you know, like, programmed to like, you know, bring in traders and figure out how to optimize,

like, how to like optimize like losses and things like that. Like, this is very, very different. Well, talk to us how the prices are actually set then. And why does, you know, a platform that ostensibly is a peer-to-peer trading platform need market makers at all? Well, if you list a new market right now, like on, let's give an example, like even Fed rates, rates, you got to kickstart somehow, right? Like the financial markets need market makers, right?

And they are peer-to-to-like financial markets are the ultimate. version of peer-to-peer. That's what they are. But it's basically a way to kickstart and bootchab equity. Actually, our most liquid markets, the more successful the market becomes, the more profitable market becomes, the lower the percentage of market makers, like, whether it's like Sasquahana and institutional market makers and others, and the higher it is, it's basically organic liquidity. So actually, the more successful it is and the more profitable for us and like, you know, anybody, it's the lower the participation of these market makers. So the use is actually like you got to have somebody that starts the bid ask.

Like otherwise you put a market and there's nothing. It's just that. And so you have to kind of break the chicken in the egg. In some ways you start with the chicken and you incentivize that chicken so that the egg comes and then you basically get the flywheel rolling. So I think it's kind of exactly the same as financial markets. And like a lot of our liquidity is in the non-liquid markets market-migured driven and the liquid markets non-market driven.

Let's talk about some non-sports stuff. the future. Like, you could sort of futureize anything, right? When you envision it, could you have, could we one day have a future for every single stock on the exchange? A perpetual future, a perpetual Tesla future, a perpetual Apple future, a perpetual, like, could it be a world that we live in one day and a perpetual 10-year treasury future? I mean, gosh, is everything in Arabic, right? So, you know, long-term vision is like, yes. I mean, I just think like, you should have a market. A perpetual future for private companies, a SpaceX

future. Yeah, and you know like the idea of, so can I get like one I guess general and then specific answer generally and then specifically. So the general sort of principle is like I think anything that has a different of opinion, difference of opinion of qualitative opinion should basically have a mechanism to

resolve that quantitatively. So like instead of debating subjectively or something like let's debate about it objectively and quantitatively which is trading, you know, what's the money. And so and then there's some limit. Like I think there are markets that do create bad incentives, and I think actually the CA does handle them, and like we really haven't done these markets.

But to your question, like, yes, I think that's probably what the next frontier looks like. And I think that the concept of security futures has been like a very kind of like, I'd say it's been a very exciting concept for that. I mean, even pre-Calci, it's not like where. But I think the CFTC-SCC relationship historically has been a big part of the bottleneck

because if you're on the SEC side, you don't really do futures. and if you're on CFC side, you do features, but you don't do securities. And you have this question, like, should I get regulated by both? I mean, you already have one that's sort of, I mean, you're like daily in your operations already very tough. Now you're adding a second one, and it doesn't scale linearly. It scales sort of quadratically.

And so it's been really tough historically, but it may be now in this environment, I think it might be possible. And maybe we'll figure it out on Monday, so we'll see. On Monday. Okay, can I go back to the market makers for a second? Yeah. Because this is an area where I think people have, a lot of questions, but what are the actual obligations of market makers on your platform?

And you talked about how in the beginning, you know, maybe you have this really esoteric contract about throwing rubber objects onto basketball courts or whatever it is. We don't have that, but, you know. No, but you know, theoretically. That one is the FC would block. How do market makers decide what contracts to actually support initially? And are they obligated to come in and provide liquidity for everything? No, because, well, not everything, no, because like, well, you have fair access sort of requirements

on a CFC regular exchange. So you have to have rules that, like, basically are generally, like, accessible by anybody in a certain sort of like tranche or whatever, but like, if a market maker wants to come and trade on cashier, they could do that. And they have no obligations they can make, they could take, they could do whatever they want. Generally, what happens is like, you know, if a market maker wants, like, okay, but then how do you kind of incentivize liquidity, then you could sort of sort of, sort of,

say like, okay, maybe you rebate you some fees if you basically commit to obligations. And the obligations, the way they look like is like if you make on the Fed market, so that's an actual specific example, like you put like 75,000 contracts up on each side within like four to four cents spread and you have like 98% availability. So you're pretty much there every time you kind of probe. You could, for example, get your fees that you pay rebated so you don't have to pay. So that's kind of like actually our most common type of. I mean, this is pretty much like market mayor program.

I love them our public. And people can sign up to which market. they want to participate it. So some people sign up to economics, some people do politics, some people do sports, some people do a combo of both. A lot of people do financials.

And the reason you want that actually is because without any sort of structure, then no one is going to commit to anything, right? Then people will only do it when it's like advantageous for them, and they won't do it when it's maybe like a novel market where we need to kind of bootch up liquidity and so on. So you have to figure out a sort of set of incentives,

especially in the beginning. And those over time go down as the market goes more and more liquid as you need less and less of them. And are the rebates and incentives and I guess the information, is that equal for all the market makers on the platform? Because you also have... Depends on the obligations.

Okay. So you're like... So what, finish the sentence? Well, I was going to ask about KT. Yeah, yeah. So people ask a lot about KTC tree. So fully, it's fully information. Like, we've operated for five years.

It's fully solid informationally. It's like run independently and so on and so forth. What I can say like emphatically, KT has absolutely no advantages, like in any way, shape, or form of other other market makers or market participants. And we've always said that, you know, You know, we don't think of this as a flank because it's true. And the CFC audits us and they see the numbers and the numbers, you know, are factual. They're not the best performing trader, let alone market maker on Calci by orders of magnitude.

Like, you know, I'll leave it at that. They're successful because they're not that successful. They're doing okay, I would say. And it's fine. They have, you know, try to kind of like bootchap liquidity in some of the markets are harder and so on and so forth. And that's a good thing. Like, otherwise these markets would sort of not be there. But say for sure is they don't have any privileges or benefits outside from anybody else.

Aside from SIG, we have some small teams, two, three people that sign up to market maker programs. Some of these teams are actually beating all the other markets. The institutional, including ours, institutional are usually better than ours. But what we do is like there's like tiers. So if you kind of like abide by certain conditions, you can get more rebates than if you do lower conditions and less rebates. And those are accessible to anybody that basically would do the conditions uniformly. one, because regulatory-wise, we have to. And then two, because otherwise, like,

people wouldn't trust the sort of marketplace. So, yeah, there's no, none of, like, we got accused a lot about a lot of different things, you know, but, like, that's normal. I mean, there's, like, a lot of incentives and interest that are on the other side of this equation for specifically now sports at the time of those elections. But I think that kind of, like,

we let the truth mean revert over time. So obviously you have these sort of legacy market makers who are now participating on your platform. You mentioned Susquehanna, et cetera. Have you seen, like, I'm very curious about whether we'll see legacy institutions become actual, sort of like, use your markets for actual hedging purposes. Now, I'm sure there's some around the election. But some of these other things, like I'm curious, for example, do you know other hedge funds

that might have a particular trade on and they want to hedge against the possibility of a negative NFP print because they think that a bad jobs report is going to bust some trade? Like that is the risk or maybe a sort of hot CPI trade, et cetera. Do you see institutions using these markets yet to actually take hedging or positional trades yet? So yes, but it's kind of a size thing, right? Like the main bottleneck is basically liquidity. And it goes like the same question. It's like you have to incentivize more and more liquidity over time so that like you get the larger sizes.

So like a typical, I mean, the way I think about it is like there's a small prop shops and the smaller shops like those are doing some. And like, because you can take millions of liquidity on cash sheet. It's not that difficult now. Depends on the markets and so on. But then if you get sort of the buy side firms, like the larger, you know, like, you know, we're just getting the top 10, 15 on the street, 1015 hatch funds on the street. And then after that corporation's like, then you're talking like the minimum, minimum size. Like for even to care is eight figures, but probably 50 to 100 million.

And so I don't think liquidity is there quite yet. Like elections start flirting with that sort of level. and we've seen some, but like, we don't see that, like, it's just a matter of time for liquidity to build up

for the kind of, like, deep institutional use case to basically start kicking in. And I think, I see this over the next two, three years, like I think that's going to be

a very big part of cash. It's always been part of the vision because you, you create a marketplace where you can price anything. You know, what you're doing at that point is your pricing risk.

Sure. You're pricing any risk that's sort of happening in the wild. And then when you price the risk, it's much easier to create the liquidity, the same way that's easy to create liquidity for the option market today, that it's much higher for some esoteric event. As there's more and more

price benchmarks, then you can provide more liquidity. And then after that, we can basically really cater to this sort of institutional risk transfer use case, which I think is kind of where the Tam really expands long term. I mean, I assume in addition to talking to regulators, a big chunk of your time is spent going out and talking to institutional players either on the market making side or maybe by side who might one day potentially be interested in actually using this as a hedge. What are those conversations actually like. You know, you have this partnership with Susquehanna now. What are the concerns that they lay out when it comes to this new business? And what are the sort of, I don't, I guess, enticements that you offer? So I would say like right now, it's a lot more just

like learning. It's not necessarily like, hey, our approach is much more like, let's, we learn, we learn and then we figure out how to build the right product and then people come. It usually works that way, not sort of like, oh, like to come. Did Zofahana, did they approach you then? it took a while. I mean, like, we had a relationship, like, way kind of when we started, like, thinking about the company. We have a relationship with, like,

a lot of the sort of institutional pairs and, like, market makers. And, I mean, I worked at Citadel before. And, but, like, I don't know if, like, we, I mean, we just had a relationship and we started talking about it. And, you know, they see the vision. Like, Saskwana really believes,

I mean, Jeff has really believes in the vision of sort of, like, this idea of, like, to have some skin in the game to forecast any question about the future instead of debating about it. And he's always a lot of prediction market. So there's a little bit of a natural fit there. Like going back to the kind of institutional, like, what we learn is like it's there, right? A lot of them, whether they price these specific events like NFB specifically or like a CEO leaving a company specifically or they're worried about it, like, even if they don't price it specifically, but they're sort of like, this is something that I'm worried about on my thesis.

Like I have a thesis, but these are some of the external factors I could like screw it up. That's a real thing. And like they would use it for hedging. And I think the requirements of it's like, okay, some of them that are like solved like compliance regulatory, like you know, you have a clear. clearinghouse regulated, all the kind of usual stuff. But then there's liquidity, like, how much size can I take for it to be worth it for me to kind of allocate a desk and, you know, put resources into it. And then the second one is like margins, which like, you know, today it's fully cash collateralized on cashies.

So if you want to trade $100, you have to put it up, that's very difficult for like, let's say, a Citadel. Well, yeah. I was going to ask actually, do you anticipate on the roadmap sort of byside traders when there is perhaps, if it happens, sufficient. liquidity, will they be trading on Kalshi or will it be something they trade through their prime broker or their futures broker? Are you in talks with the brokers?

Yeah. And this is the same exact sort of like, what do you need basically? Like, how does it work? But yes, I mean, the prime brokerages are very important because like you get, you basically get like, they have the full portfolio. So you can get a bunch of margining benefits if you kind of do it all with one prime broker. And that's why usually prime brokers are the gateway. into financial markets.

Yeah. And the same way as our broker strategy for retail, right? Like with the Robin Hood and Meeble and some of the other brokers, it's very similar actually because you have your portfolio with the prime broker. And then like, as you're thinking about your portfolio, it's like, hey, I could add on a hedge. And it's much easier for me to do it through my prime broker than do it on a separate platform. But by the way, it's pretty crazy.

If you go to the app store and you just like look at Robin Hood, the first thing is like the football, the image of the football. Oh, really? Yeah, because they're trading through you. Anyway, just an interesting cultural. I mean, well, on that. point, I mean, there's a social utility question here, right? Like, if I download Robin Hood, okay, yes, I could get into zero or one-day options and we can talk about the social utility there,

but maybe I'm going to invest in an actual stock that generates some income. But now I'm seeing ads for football and sports betting. And I don't know. I'm sure there are some old-fashioned people out there potentially like me who would say, who would say, like, what does this do? What? What's the value? Do you think that sports, like, let's even forget about, like, I mean, first of all, I don't like sports, but. Well, I mean, but like, you know, I mean, a lot of people love sports, right? And, like, you know, I don't know.

I think that, like, my general view with these things, I mean, I'm a free markets person. Like, you know, building a company where the name is, you know, we want to have markets for everything. So I'm much more in the camp of, like, you know, you figure out what people want to do and figure out how to do it in safe, equitable. and fair manner. Like, you know, make sure that, like, it's done with fair rules of the rules for everybody to participate and they want to get smart and do their own research. And if they don't, that's on them and they figure it out and add some sort of checks and balances

around it to make sure it's safe and there's customer protection. But I'm a strong believer that, you know, sort of the job of regulators should not be dictating what people should do with their money or their lives. Like, I'm a very, very, very staunch sort of opponent of that sort of view of what a regulator should do. And I think that fits there. I mean, in some ways, maybe that's like, like, if you look at Romney, like, there's all these choices now. And like, it's a bit weird to me that like the decision here is sort of like, don't let them make the choice. Like, if they want to invest, then great. And if they want to do football, then also great. I mean,

and the solution to that feels weird to me, which is like, hide that option because the 50-year-old or 30-year-old man, the son Robin Hood needs me to figure out what to do with their money. Right. And so that to me always felt weird to me. And I think that's where financial regulation has sort of like gone too far in the last. I would even call it regulation. I'm very pro-regulation. We chose to be regulated up front. Right.

So, but it's sort of like, I would say like, I would say, I mean people like about law fair, but whatever. Like the financial regulators, I think, had taken it too far in that dimension. So as we've mentioned a couple of times, there's this big meeting in D.C. There's going to be a round table. Well, incidentally, so Tracy mentioned earlier in the day, we interviewed Terry Duffy for an episode, and that'll be out in a couple weeks. And I guess you haven't met, he said. You've never met, but I guess you're going to meet one day. But what should we ask Terrick?

And he said, I think if I'm getting this right, he said that Kalshi characterized itself as CFTC approved. And he says it's not that it's instead not CFTC banned. that actually because it's the self-listing, are you CFTC approved and or is it just that the CFTC has not said no? Well, it's factually incorrect. I mean, I don't know. You know, it's like, I mean, I'll be Terry. I'm very excited with meeting Terry. I mean, Terry is a legend. But like, we got a license and then a second one. Okay. So we got the exchange and then the clearinghouse and then the broker license. So the exchange was like in 2020 and the clearinghouse in 2024 and then the broker one was in 2025. there's all approvals. I mean, it's not like, you know. But for instance, the individual contracts that go up to the CFTC,

are those each getting approved? Well, the election was obviously actually disapproved, right? Like, and we had to sue over it. And it was it, we were clearly right on the law, given that we won at the district and then the appeals court. So maybe there's like a separate dimension here, which is also the regular is not always right. But, you know, there's a whole other thing there.

But self-certification is a regime, which, by the way, CME is also operated with a, and they, you know, so from a, from that specific perspective, for each market, yes, it's not that every market goes through a prospectus like in the SEC and then gets approved. It's actually like a disapproval regime. Yeah. But the CFT has authority to stay things and it's a very broad authority, right? So maybe it's a good question to the CFTC because, you know, I can't speak on their behalf.

Oh, you can ask them on Monday. Yeah. I don't know if they'll be on that table, but, you know. Oh. What is the, uh... Well, we talk to CFT all the time. So, you know, obviously, um, Polly Market is. a major competitor to you.

What do you see is like, what's your vision for what is traded on chain? And what are, like, could you imagine, you know, we just talked to Don, he said in he could see in five years, almost everything being on chain.

Like, do you see that? Yeah, maybe. I mean, well, it's interesting because probably now is they're doing, so there's kind of the on chain strategy

and then the kind of what we did, the regulated, you know, normal clearinghouse, like regular clearinghouse strategy. And like now what they're doing a sort of, they're pivoting to our, basically. That's, it's, and so our view generally is like, well, it's a pretty positive sign

for our strategy, probably, right? Because, you know, but I, but even setting aside, well, my point is like, they're regulated, to me, it's a regulated, like, front. It's more. Sure. So, so, okay, there are a lot of benefits. I really believe that. And I think the, the, to being to on-shane. Okay. Yeah, because, like, one of the ones that I'm less interested in is sort of, like, skirting regulation, like, that's, but, but I think that, like, there's a number of things, which is like, my mental model for it is a bit like, you know, the banking rails were set up in the kind of early 20th century. It's like, J.P. Morgan, a bunch of his friends are like, hey, how do we dominate this whole thing? And, you know, they set up a bunch of regs, and then they closed the door

behind them, and that was sort of that. And there's a bunch more complexity to that. But to me, this sort of whole on-chain thing is, imagine a bit like having given that problem to a bunch of smart, like, hardworking developers without any limits. and let them build, right? Obviously, there's a lot of good that's going to come out of that. And then there's going to be some bad that comes out of that obviously.

But like, to me it's like, well, there's a lot of liquidity on Shane today. So that's something that we should access at some point. Two, I think the clearing side, there's a lot of benefits for, you know, how like you have to do novation and you have to do immutability. And usually right now we do it from a like operational legal perspective.

And obviously there's some tech. But on chain really helps with that. That's like basically what it's designed to do. And so over time, like I think, I hope as sort of regulators get more permissive, like I see some parts of clearing going on chain where, you know, it enables some of these use cases and also more transplants. Like the trades and the transactions are all transplants for everybody to see. And then people can build interesting like UIs and interesting projects on top

without us having to sort of this whole permissionless sort of concept. And so I'm very bullish on it. I do agree with Don actually that like over the next four or five years, you see companies like Robin Hood, like companies, like a lot of companies are leaning in. Well, Calci is also leaning in. So we're pretty excited about it. So obviously the trajectory of your business has changed enormously just over the past year,

less than a year, really. If you were thinking about it now today as we sit here, what's the biggest, I guess, blockage to further growth for Calci? You know, right now, the question I haven't been really thinking about, it's been growing so much right now. It's like all about how do we like not break, basically? because like, I mean, honestly, like, we grew way more than we could have possibly imagined, even in the most bullish scenarios, even post-winning the election lawsuit.

Like, even like December 20204, like, forecast for 2025, like, there's nowhere near what what it is today. So, and it's interesting because we're not, it feels like we're sort of like halfway through. Like there's still just the current structure, I think we're not even halfway through. Like, we have more brokers so long. We have a very deep pipe on a broker. so that's great. And more sports.

I think it's the frontier, it's the SEC thing. So I think it's like more markets. Like, and I think we have a lot of what we want, I think over time is like, how do we start doing company-related prediction markets? And we're very excited about that.

I just have one last question. And it's kind of a softball. But like, after years of fighting all these different battles, regulatory battles, states, etc., like how good does it feel? It must feel really good

to actually kind of know that the business, is real and have these battles. Yeah, I mean. Just like described that feeling. It's weird because I don't know if I feel that much about this year than last year. I mean, Luan and I, when you started the company, we really built a company around, I love this book. Have you ever read the book, like, Discord takes care of itself?

I don't think so. It's a great book about life, like everything, honestly. Like, I really, it's just a right, you know, like, so John Wooden was sort of basketball coach. It was like most legendary about it. I mean, the whole thing was always about, like, never mentioned winning about training the teams. Like, folks in the process and, like, Jay and. they are, like, just fall in love with the training. And, like, if you do, you just start winning.

And, like, I would say a few things. I see these things that sort of, there's good times and bad times for all companies. And so, yes, right now we're having a pretty great time, like, as good as it gets for a company. But I don't feel that different. I think it's just, like, solutions bring new problems and, like, then you focus on the new problems. It must be so much nice. I will say the one part I feel pretty good about it is winning the election lawsuit.

Like, that one, because we were so. there was some pretty big time vindication there. Like, I think we were, you know, because imagine like in 2020, like three going up to our board, you know, like Sequoia and a bunch of others and it's like, hey, like, yeah, we're not really figuring this out. It's been two years of like, you know, pouring money into this and like, you know, and nothing is working. We lost half our team over it and like, company might die. And actually what we're going to do is a going to triple down and sue our regulator now. So it's, you know, that was a, they looked at us.

They're like, well, that, that doesn't feel right, you know, like. And we still went through with it and it ended up being absolutely the right decision. So that, I think maybe like October 7th, the day we won the election lawsuit was probably the day I felt happiest.

What did you do when CFTC dropped the lawsuit? That was not that important. It was the one where we, the appeals were you actually, that's sorry, dropped the straight, yeah, yeah. Yeah, that was important because well, I first screamed a lot

and like we just like, you know, all got shit face in the office and like, you know, you know, it was amazing. But then, you know, then we got back to work because we've got extremely anxious about, like, you know, launching the thing. Yeah. That was a brutal three weeks because we had to ramp up really aggressively.

And, I mean, we really went from, we really grew 100 X overnight. Like, it was crazy. And so that was the three weeks of where I worked the hardest in my entire life. I was sleeping in the office. Like, you know, I was like, I was given this chance. Like, we have to basically, like, you know, utilize it to the fullest. And it was, and we didn't charge fees on the election market. I don't know if you knew that.

It was an intentional decision because, like, the KPI here is we've got to show the word that these markets work. Yeah. And it's done safely and nothing bad is going to happen. And democracy is going to be totally fine. And you'll see, we're announcing a few things with some big news organizations pretty soon. We'll see the shift that's happened in culture where like the level of embracing

that's happening with prediction markets now. That's pretty nice to see. Plus South Park. And South Park. Yeah. Terrick Mansour, thank you so much. Thanks for coming to Ahlavas live. Thanks a lot.

Thanks so much, guys. That was our conversation with Tarik Mansour, recorded live on stage in Chicago. I'm Tracy Alloway. You can follow me at Tracy Alloway. And I'm Jill Wisenthal. You can follow me at the stalwart. Follow our producers,

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