Creating prediction markets (and suing the CFTC) with Tarek Mansour and Luana Lopes Lara

Permission-first vs forgiveness model

Unlike Silicon Valley's typical 'ask forgiveness' playbook, Kalshi spent three years (2019-2022) seeking CFTC approval before launch, prioritizing regulatory legitimacy over speed to avoid risks inherent in financial services.

Suing the CFTC over election contracts

After the CFTC blocked election markets for two years via 'pocket vetoes,' Kalshi sued and won in late 2024, establishing that elections have economic impact and don't fall under prohibited categories like war or terrorism under the Commodities Exchange Act.

Self-regulated operational framework

Kalshi operates as a self-regulated entity where every new contract receives a 24-hour CFTC review window, creating a 'regulatory-market fit' through iterative collaboration with regulators.

$10.4 billion monthly volume milestone

Kalshi processed $10.4 billion in contract volume in February alone, with 80% of users engaging as information consumers rather than active traders.

Election markets as the holy grail

The 2024 election served as the definitive use case, with prediction markets proving significantly more accurate than traditional polls and demonstrating the value of truth-based forecasting mechanisms.

Modern media tailwinds

Rising media polarization, algorithmic feeds, and widespread distrust of traditional information sources created the necessary conditions for regulated prediction markets to thrive—a demand that didn't exist 10-15 years ago.

Optimist versus paranoid partnership

Luana's optimistic, risk-taking approach balances Tarek's 'paranoid,' expected-value mentality derived from his trading background, creating decision-making tension that proved crucial during crises.

The 'try again' survival strategy

After the CFTC's 2022 pocket veto forced layoffs and caused investors to lose faith, the founders maintained morale by adopting a dogmatic 'try again' strategy despite overwhelming evidence suggesting failure.

Board resistance to legal action

Board members Alfred Lin and Michael Seibel initially opposed suing the CFTC as a dangerous 'anti-pattern' for a 25-person company, but eventually supported the 'no other option' challenge that bet the entire company.