What's the question you think that your team Elizabeth doesn't want me to ask you today?
This is an interesting question. What's the question I at least want to be asked?
I don't know. Should ask Elizabeth. Maybe we should. We should. Elizabeth, what's the question Tarek wants to be asked?
What do you think of the Polymarket CEO? I have that question. We'll just watch you [__] it up in real time. All right, let's see. Okay. Smart girl, dumb questions. What's up with prediction markets? And does their very existence signal the end of society? This is Smart Girl Dumb Questions. I'm Na Raza, and today I'm with Tarek Mansour, the 30-year-old CEO and co-founder of Kalshi. Hi Tarek.
Thank you for being here. Explain what Kalshi is. Give us the high level.
We're the world's largest prediction market. And you know, prediction markets are very simple. The easiest way to think about them is they're like the stock market, but you're not buying and selling shares of a company. You're buying and selling shares, yes or no shares, on whether an event is going to happen or not. A simple question that people relate to or understand.
And you can bet on everything on Kalshi. Almost everything.
Very important. The almost is very important.
The 2028 presidential lineup, the NBA playoffs, the World Cup, the US-Iran deal, Strait of Hormuz opening date, or how much traffic is going to go through, whether Taylor Swift is going to meet the Pope. Who the hell cares about Taylor Swift and the Pope meeting?
Who cares about Taylor Swift and the Pope meeting? I don't know about that. It's like a weird intersection of the two.
I don't know. I mean, what is the single biggest prediction an investor has made on Kalshi? Like what's the size of that? I mean there are obviously institutional investors that do like tens of millions of dollars in predictions, and I think that there's, and that usually you see them in like, for example, like economic indicators like will inflation go up or down or will GDP go up or like the... and they're on Kalshi like they are, they're placing a bet on the other side of some retail investor who... or like some institution or other. I think of it as a little bit of the market for average people because...
That's such a motivating tagline, the market for average people.
But it is because I mean if you look at top performers, the people that are predicting all these different things and they're doing a great job at it.
They're like average people. You would not... it's, you know, a small percentage of them went to Ivy League schools. Most of them didn't. A lot of them have blue collar jobs. They don't trade options. They don't trade in traditional markets because they feel that they're rigged against them. Some of our best traders, the top performers, like one of them is this guy who lives in Kansas, no experience in financial markets. But can forecast inflation incredibly well.
I don't know. I didn't ask him. You know,
so these people you're talking about are very different than the kind of headlines that we see. We see Trump's teleprompter guy. We see George Santos. We see the insider trading juicy stuff.
But on your point about the average investor, it's a really interesting time for you to say this because Truth Social, the platform in which the biggest shareholder is Donald Trump, has just announced that they have a Truth API which will charge people up to $100,000 for early access, milliseconds early access to things like the president's own tweets, Truth Social's posts, whatever they're called. So, how does something like that change your thinking on the average investor? Because that seems like it's going to benefit the institutional investors.
I mean, I don't know what that has to do with Kalshi. There's so much that people are trading on. I mean, like if institutional investors are going to...
What do you mean? Wait, sorry. What do you mean you don't know what it has to do with Kalshi? I'll give you an example. The Strait of Hormuz traffic, you know, that all these questions that are there. Will there be a US-Iran deal? All of those things, you know, the president is putting out posts on. I'm not asking you to make a moral judgment on his business decision to understand the question. I understand. How does it impact the average investor getting access when you're creating like premium markets for edge information?
I don't know. This is like the age-old thing. Part of the reason why people use Kalshi is because of the low latency dynamics in the stock market. The low latency dynamics...
What you just described, low latency dynamic, is basically when a hedge fund, whether it's Citadel or others, have maybe like a little bit of a faster feed from the NASDAQ or the New York Stock Exchange...
So not a hedge fund, but even a market maker...
Market, same. Whatever, they have a little bit of an advantage on speed where they can see what the stock price is going to be a little bit faster than the retail individual that's sitting on his couch, and then they make money off of that because they get the information faster and they can like...
That dynamic is less prevalent in prediction markets because prediction markets don't trade this sort of super fast low latency stuff.
But aren't people coming in and out of bets on your exchange?
Yeah, they trade in and out, etc. But like it's not the same as like if you want to figure out where a stock is going to go, you kind of have to figure out who's buying and selling, you have to do it very fast. If you want to figure out whether Brexit is going to happen or not, you just need to be pretty smart about understanding the state of the world. You have to read the news. It's a much more holistic thing than like some sort of small micro advantage that you can gain in terms of like, oh, I have a slightly faster feed or not. Our top performers are not the hedge funds.
But you're moving towards that. I heard your co-founder Lana talk about like the institutional and international.
Yeah. But that's different from like, you know, like market makers becoming a bigger part of the pie.
When I put out the question and I said, oh, I'm interviewing the Kalshi CEO, what do you guys want to know? Like by the way, and I want to say you did $30 billion in trading volume in June 2026. So you obviously have a lot of users and a lot of people that are, you know, fans of your product, but you also have earned so much hate. So here are some questions from the audience: How does it feel to prey on vulnerable people and destroy lives? Why is he destroying society? Why break down every barrier between self-destructive impulsive behavior and personal financial future? If you'd like to put frictionless betting to lonely, insecure men, why not start handing out nukes to toddlers? How does he sleep at night? Does he have a moral compass? How does it feel to profit from addictive arbitrage, etc., etc. So, and by the way, this is not like the DSA. A lot of these people, tech executives, business people, lawyers, etc. So, this is the sense that people have, and you're not shocked hearing these questions.
I get these on comments on Twitter sometimes, and like we see them. Do you want me to address each one? What is it?
No, I don't want you to address each one. I want to talk about the sentiment.
There's a complete misunderstanding of these markets, frankly. And I understand that the press and mainstream media, it was always the case when Uber came around. If you read the press about Uber when it grew, and Uber, was Uber a perfect company? Absolutely not. There was a bunch of issues with that company. None of us are perfect. We're all trying to do the right thing.
But if you read the early press about Uber, it's like this is the single least safe thing that ever graced humanity. It is horrible.
We hate it. Stop Uber at all cost. People basically believed that like a lot, you know, Uber was an evil company for a period of time, right? And I don't think we're there at Kalshi. I think our growth and the usage of Kalshi shows otherwise. There's a lot of people that love the product. They use it. They use it very actively. So yes, there's sometimes a vocal minority, and that vocal minority is driven by a lot of the things that are being said in the media about us and about the prediction market industry that quite frankly are not true, and those things generate clickbait, like when people say about, okay, you know, we are listing markets on death.
It's just not true. Like, you know, there are competitors that have listed those markets, and we are like kind of suffering the consequences of that because the headlines are not...
Competitor name listed a death market. Its prediction markets have listed death markets.
Well, you had a situation where like...
Yeah. So there was like kind of a prediction market on Kalshi which was, you know, when will the supreme leader be out of a job and, you know...
But that market had a clear thing right there on the title that said it will never pay out based on death. That's how all... because anything...
But the dude was 86 and the United States is bombing the country. So it was like a...
Sure, but you know, that's all these people have read the rules and they've seen, and we have been very firm about our principle. We stood by the principle of not letting bad people profit off of death. It was a loss for us. We refunded everyone that participated in that market because some people claimed they did not understand the market again. And we made it even more clear. But that's what it is running a consumer company. Like when you're running a consumer company that has a large number of users, there's going to be some people that, you know, are going to be pissed off, and society is also going to ask questions about like, what does this mean for society? And there's going to be critics. And I bucket the critics into two categories.
There's critics that is essentially genuine concerns, like they are questioned about like, okay, are we doing enough on policing insider traders? Are we doing enough on customer protection, etc. And that type of criticism honestly in some ways like motivates me. What are places that are blind spots? Where can we improve, etc. As a founder, like if you look at my approach, my history, I actually took a very opposite approach to the typical Silicon Valley approach. I took an approach of like, let me spend four years getting regulated up front, thinking about all the things I need to build into the system to make sure that it's safe and people are safe using it and it's fair and it's neutral.
And did you do that because you wanted a regulatory moat around your business or did you do that because you think it benefits your business? I'm asking what was the motivation for that?
The motivation for that, we wanted to do the right thing. You know, at the time in Silicon Valley, there was no way in hell that you would start a company in 2018 in Silicon Valley and the correct strategy from a business perspective is like, oh, get regulated before you launch a product, you know, if people want it. It's usually like move fast, break things, grow as fast as humanly possible, and then get regulated. And we took a different approach because I was like, look, I want to build a legitimate financial market that people are going to trust. There's a second bucket of critics. And I think that's just like online hate. I mean, like, you know, anyone who's in the public sphere just kind of receives a bunch of it, and part of it is because there's like scoop-ups left and right. Part of it is because like the media tends to be clickbaity and, you know, generates all these headlines that are like negative, and part of it is because we have a massively organized incumbent industry in the casinos and sports books and others that have come out after us and seeding all these narratives against us left and right. But it doesn't make it true. I don't know if you want me to address one by one.
Yeah, I think that like what's interesting to me is understanding the overall like why what you think your company is doing and what your users think and like that your company is doing is so different to what many people... I'm not going to say it's a vocal minority and I'm also not going to say... concern about how is it that our critics are people that are not using our products worried about the people that are using it that really love it. As I'm hearing you, like you're kind of putting yourself as, you know, a person who's going to Washington, who's trying to get the regulation, you're framing it in this noble way, and part of society's concern is there have been other actors who have come out and done that, like Mr. Altman goes to Washington, Sam Altman and OpenAI, Mr. Bankman-Fried goes to Washington, you know, he was the one that wanted regulation in crypto and he was showing up, and neither of these...
Which large... I understand you're using some examples.
Yeah, but like these are neither of these are good examples. So I'm curious who... Well, you use those two examples, but I'm saying who do you think... who is your model?
Which large consumer company CEO does not go engage with regulators and policymakers?
Well, I mean Travis didn't want to. Travis Kalanick when he was doing that was a good idea.
No, but I'm asking you, who do you think is a good model? Obviously, I've given you two bad ones, both named Sam.
I mean, every single other, you know, founder, whether it's, you know, Vlad at Robinhood, whether it's Tony at DoorDash, every tech CEO or CEO of any large company, you have to go engage with regulators. And I've done it not when even... this is the difference. I didn't even do it when the company got large. I used to do that before even launching a product. And I was engaging with regulators and I was engaging with policymakers. And that's by virtue of being a regulated company. Yeah. My alternative is actually going offshore and doing a bunch of things and getting big and then coming and running around DC. But I was like actually running around DC before even launching my product, and Kalshi has done an incredible job. If you put away the clickbait, like if you read below the headlines, like, you know, prediction markets, insider trading, then you read below the headlines and you read the text in those stories, you see actually that the insider trading is happening on offshore platforms like Polymarket, etc. And that Kalshi is actually policing it and catching the bad actors.
Yeah, I want to talk about that, how you do it. I don't know how you catch these guys. So you get...
It's easy to catch these guys if you want to do the work.
What is like the right analogy for you and Polymarket? I was trying to think like, are you Lyft to their Uber? Are you, you know, Airbnb to their Vrbo? Like what is the right metaphor for you guys?
I don't know. It's a regulated financial market and, you know, one that started offshore in unregulated territories. It's... I don't know. I mean, there's some crypto comparisons I think because they're like financial markets, but I don't know. It's, you know...
What's the nicest thing you can say about Shayne Coplan?
Nicest... nicest thing you can say about the founder of Polymarket? Well, I think he's definitely like ambitious and like, you know, he's pretty like strong-willed. I mean, I think he's built a global brand that a lot of people know and a lot of people like. I mean, some people don't like it, but a lot of people like it. And I think that's very impressive.
What's the meanest thing you can say about him? I'm kidding. I'm not going to say something. I'm kidding. What I really want to do is like in this interview, I basically heard two types of interviews that you do. One is kind of like the VC type pods where you talk about the founder journey, and those are like maybe we'll call more fluffy interviews. And then I've heard this other kind of category of interview where it's like combative. Someone is trying to get you to say that Kalshi is gambling. You're boring them to death talking about like the 1905 grain case from the Supreme Court. I don't think either of those conversations are particularly interesting for my audience. What I'd like to do is I see you as like this category of founders who are going to be influential in the creation and design of new world markets, etc. And I have, you know, interviewed and produced interviews with all kinds of people like Mark Cuban, Sam Altman and OpenAI, Elon Musk, Brian Chesky, like people who have been in that space who are creating a category. And I'm really interested to understand how you think.
I think what we go to is like a lightning round where we try to understand how you've drawn the lines in some of these markets. So let's start with death markets that we talked about. Kalshi explicitly doesn't allow violent markets defined as war, death, nuclear war, kidnapping, and missile strikes.
Like wildfires? We don't do wildfires.
Wildfires. Okay. So why and when did you decide that? It's very clearly like...
Day one. I mean, when we're getting regulated, you know, this is the whole four-year process when you're talking engaging with regulators. But day one we've always been very firm about like you don't want to create markets that can directly incentivize bad behavior, you know?
So you don't want to create a market where like it's someone going to die and you incentivize someone to go kill them, or start a gender reveal party or whatever. Like all of this stuff is... and you don't want to do that because I think there's a moral hazard, like you don't want to create those types of things and that's where the line should be drawn.
I think by the way the law in the US doesn't allow these types of markets I believe, and or at least like gives the regulators the ability to shut down these markets, and a lot of these markets have been listed offshore by offshore competitors, and we've been trying to educate people that like we are not the source of these markets. We disagree with these markets. We think they're immoral. We think they're a bad idea. And I stand firmly by that.
So you do though allow weather markets.
Because weather markets are useful because why?
Is there a lot of weather market trading?
Well, weather derivatives have existed forever. Like people trading on weather futures is just like a very age-old question, but like there's a stock market which is like moving money from someone who has it to someone who needs it. That's the stock market. Capital allocation. Our markets are what we call derivatives markets. What our regulator, the CFTC, does. Derivatives markets are not capital allocation and they're not moving money from someone who has it to someone who doesn't need it, but they're moving risk from someone who has it to someone who seeks it. The second thing they do is they get us smart. They forecast where things are going to be in the future.
Yeah. So like an example I've heard you give that I think will help clarify for people here is like you talked about how in the 2016 election there was a conversation about will Donald Trump win or not and there was a sense that if he won the stock markets would plummet, but in fact he won and the stock markets went up and that kind of proxy in that case, proxy is a bad proxy for the actual event.
And it's funny because when people think about prediction markets are new, they're not new. They've just been being done in a bad way. And also inaccessible, like if you are a large institution in Wall Street, you can take a position on an election, you have been able to do that for decades.
But if you're an average person, you couldn't, and that really...
Well, you could in different ways, but like in less regulated...
Not in a regulated, like proper... I mean, the point is that you couldn't really. Let's take the example of the election, that's an example. How before prediction markets, how do we get informed today about who are the leading candidates in 2028? It's like some mainstream media, it's polls. But people don't really trust the polls because it's run by elites. But the nice thing about prediction markets, and there's something so elegant about them, is it's not a metric that's coming top down that is handed by like a select group of people and institutional elites that tell people, oh, here's the candidate to watch and here's the candidate not to watch. The crowd is deciding.
Although you can have market movers and you have found some and weeded them out, like you can...
Sort of, sort of, but it's very hard to move a market, and we found that like even if there's a big institution that comes and tries to move it in one way or the other, it lasts a few seconds because there's an incentive to bring it back to the right price. The crowd wisdom talks.
You can make money in those seconds.
The people that correct for it make the money, but the people that are trying to move it in an unnatural way lose money usually. So they get punished. But like predicting all these things and having a crowdsource estimate of all these different things is a very elegant way to deal with them because, you know, historically it's like think about earthquakes.
But why is it better than AccuWeather or whatever, Dark Sky, or...
It works better. It's more accurate.
Because they're using all of those inputs and...
It's the beauty of the wisdom of the crowd. This is the whole premise of what we do. The whole premise we do is if you bring a large diverse group of people and you cannot pick them in a crowd. It's not like, you know, the Wall Street guy that's wearing the, you know, card, the Wall Street, you know...
Not your MIT buddy or whatever.
It's not my MIT buddy. It's random people that you could not pick in a crowd. If you bring them in a group and you have them predict the future, they will be weirdly and crazily accurate.
Sports remains like the majority of your prediction market. Correct?
I mean, it is a majority right now, but that majority is declining very rapidly because the amazing thing is people understand sports and they like sports and they love trading it, and that's great, and it's a way to onboard, but it's been an amazing way to onboard a lot more people to a lot of the other markets that like they're getting interested in, and you see that in, you know, people are now getting more interested in like political events.
What about... we'll get to political markets in a moment. What about pharmaceutical markets? Because we started talking about the top and I want to make sure I give you a...
Why do you think they're very bad?
I mean, I don't know. You know, actually, walk me through the... I actually was having this... this is one of the examples of like a ton of comments of, oh my god, this is like, you know, but tell... I was having this conversation with Mark Cuban, and Mark I think is invested in Polymarket through like a proxy or whatever, but he was saying just because something looks bad doesn't mean that it is bad. And I agree with him on that. And I was thinking about the incentives that it creates. Like there's all kinds of information that people in a cancer trial have that maybe they could use as insider trading, which we'll get to separately. There was... I actually think this is the thing with pharmaceutical.
I want to stress on this. I'm going to do the journalist this one. Why do you think they're bad? Let's just bring... let's just you and I brainstorm.
Well, I'll tell you, I'm telling you.
No, but let's brainstorm. Let's brainstorm, you and I, but I want to tell you why I think the worst argument. Like what...
But I don't want to give you like a bad straw man argument that you can blow over. I want to tell you...
But not a bad, like a genuine, like what is the genuinely worst argument around these markets?
I think because they're thin markets, right? I don't think pharmaceutical markets right now are going to think about it. So thin markets meaning that a single investor could come in and make a big bet that could fundamentally shift what we decide to invest in as it relates to drug development or...
Let me address that. So first of all, there are markets on whether drugs are going to succeed, and they're called the stock market.
Yeah. They're Eli Lilly stock or Novartis stock or...
Or the newcomers. Usually the newcomers, a biotech company gets started, flashy CEO, super charismatic. Oftentimes, by the way, the biotech CEOs are super charismatic. Why? Because they have to sell the stock before they have a product in market. Usually a company gets started, you get a product, you get a lot of users, you get a lot of revenue, you win as a company, and then you go public. A lot of these companies have to go public before they even have FDA approval, right? And it happens very often because they need liquidity. And how do they do that? By saying, oh, we're definitely going to get FDA approval, this thing is definitely going to work. They have an incentive to just basically... today, they have an incentive to tell people that like the odds of success are probably higher than they are because, you know, that's what the CEO of a public company should do. Now the thing that's interesting about it is we already have a prediction market on the success of drug discovery in that stock. The thing here is that like that stock is equal to the probability of success of the drug at that point because now the drug hasn't really succeeded. And if the FDA approves that drug, that stock is going to go materially up, and if the FDA doesn't approve that drug, that stock is going to go basically to zero. You're talking about like a single therapeutic or new biotech, usually all the new biotech companies. Now the problem with the stock is, you know, it is actually much more influenceable by like Wall Street and a bunch of other things, if the CEO is very charismatic, if he has the right friends that are buying up the stock, all these different things. So it actually kind of... if the correct value is like 70% chance of success, that thing might trade at like 80%, 90% chance of success. It is actually not the correct thing. There may be a premium or a discount or whatever it is. And so what's amazing about these types of markets is that you're now crowdsourcing. You're giving a much larger pool of investors or people the ability to kind of give us an additional data point to that one that we already have.
So one way that you would find edge, say I were on Kalshi and I'm like betting on this, is I might then start calling up friends who have AML or other cancers and they're in trials and starting to try to get information from them as a way to understand how the trial is going.
If I'm a cancer patient, I definitely don't want to be called by like random investors. I mean...
I mean, I agree that like it sounds a bit... but think about it, because for the next cancer patient that's considering it, wouldn't they like to know what the experience of others have been? Assume there was a bad drug that's in the market right now, right? And obviously that's a terrible thing and some people are... Don't you want to know as soon as possible? Don't you want an investigative journalist to start calling up all the people that are basically, you know, taking that drug and aggregate a massive file on this thing and then put it out to the public? Do you want that or...
Well, I mean, the difference in these two examples, an investigative journalist is like putting out the story so people can know. The prediction market investor is making a bet so they can make a profit on it. This and one way. So that's a very cynical way of putting it.
Knowing it. But I'm not saying... I mean, you can dismiss it as cynical, but I'm just saying...
It's not... I'm noting that's one way to put it, but let me rephrase that a little bit. Let me rephrase a little bit. We are creating an incentive now for people to go out and do the research.
So but what about the other situation where like the drug is going to work but there are some side effects or there's something and then you end up like not investing in a really good drug.
I'm a believer that more information is always better. That's my belief. But like... but I think the difference here, because... and I really like... and by the way, people are going to hear us and they think that we're like arguing, but actually this is just a Lebanese and a Pakistani having a conversation at like totally normal household volumes. So, okay. So, but for me, I'm like the...
That's actually right, isn't it? Typical.
But for me, like the idea that these... it's like what is the incentive for knowing the information? And I'm not here to be like, oh my god, journalism is the best thing and we're just putting it out there in the world of transparency. But there is a difference between knowing something to inform people and knowing something to make...
No, this is it. A lot of decision-making gets made centrally, but a lot of information that's relevant to the decision is distributed. And I've said this a million times. You need an incentive, some degree, some something to give someone some sort of incentive to go and probe all the places where there's relevant information for something and then bring it to light, bring it to transparency, all the information, but not insider information, which we're not trading because that's cheating. And there's like a philosophical reason for that, because if you let the insider trading, then nobody trades. But my point is markets do a very good job at doing that because they provide that incentive for people to do that sort of research that doesn't exist otherwise.
So how... so Mark Cuban asked this question. How does a bet get confirmed as a win or a loss in the pharmaceutical market?
Like it's stages of approval. I mean, so you have a market, you list the market.
By the way, I don't think these are bets anymore that they're, you know, you're betting on a stock in the stock market. If you're using bet in that realm, fine. Let's say, okay, there's a drug. Will it make it through a certain stage of approval? Let's call it like, you know, final FDA approval, which is usually I think stage four. You can buy yes shares or no shares, and that share will pay out. You know, let's say it's right now it's saying 20% chance that it's going to make it. It will go to 100 if the approval comes through, and it will go to zero if it doesn't, and that's usually the FDA basically approving or not. And you have all the same issues there that you're going to have to make sure that the FDA's, you know, regulator's cousin, etc., isn't the one making the trade. That's illegal, so that exists elsewhere. Okay, so...
But that exists in the stock market too.
There are so many other markets I wanted to go through. There are markets for Costco hot dogs. There's the market for the Pope that we talked about. There's a whole Reddit thread on how Polymarket has ruined the show Love Island. People are very upset, but we're just going to move on from these.
People are very upset, but they seem to be growing incredibly fast and like people are using them a lot. So...
So I mean, I don't know. I don't watch Love Island, but people seem to think that there's some kind of, you know, interplay between the prediction market, the Redditors. Do you ever worry about making us like dumber as a society, like leaning in toward...
Possible coming from prediction markets? The people that are succeeding on Kalshi are like spreadsheets, math, analysis, reading, reading below the headlines, skeptical, cynical.
There's a lot of like play, right? There's a lot of play money of like I want to play on some random TV show, like people that were not... like, you know, the people that are doing it on the side and not like, you know, like I mean it's like going and trying to win the Olympics. The people that are like, you know, drinking Coke and eating burgers are probably going to, you know, be outperformed by the people that are like super disciplined and running every day and doing the marathon every week and like whatever. And that's the same thing in a highly competitive environment.
The point is the incentive structure. When you say something dumb on social media, you get dopamine hits. When you say something dumb on prediction markets, you lose money. So how could I possibly be making society dumber if I'm punishing society when it's saying dumb things? It's the exact opposite. If anything, it's making society more research.
What do you think the best criticism someone's had of your, of the overall business market, of prediction markets? What's the one that really made you stop and think?
A lot of it, I think a lot about it. I mean, there's a lot of dumb stuff flying around, but like, look, I think that like there's one that's interesting about how do you define what's inside information, and that's like an interesting line, and we can talk a little about like how it's defined in the stock market, how it's defined in us. I think there's questions around customer protections that we have to be like very conscious of. And I actually think if you really dug into Kalshi and the incentive structure in our system, because we're a neutral marketplace, we don't make money when people lose.
You make a percentage on the trading.
I make as much money if they win or lose.
You still make money. You...
No, we don't make more money if someone wins or loses. That's critical. I make 1% whether someone wins or loses. Whereas a casino drives the revenue from losses, right? But if a loser shows up every day to keep on making that, a winner shows up every day, yeah, you'll keep making money off, you know. So I just want to draw that distinction.
But that's the same in New York Stock Exchange. If loser or winner shows up, they're going to make the same amount of money. But that neutrality, I am neutral. When someone loses a lot and they're doing something that may harm them, like irresponsible behaviors, I'm not on the other side of that. I'm not making more money if they start doing that type of behavior. I'm not, because I still take 1% of whether they win or lose. Whereas, like, if you're a sports book, you kind of like these customers. You want them to come back because that's how they generate revenue.
My incentive enables me to be more thoughtful and more conscious about limiting those types of behaviors because it's a small minority that gets harmed. I acknowledge your point that it's not the same as like a casino on the other side of a slot machine where like everybody puts in money and the house wins, but I do think there it's like it's not a nonzero incentive to increase the volume of trading that happens.
Oh, we... volume for sure.
Okay, so let's move on to insider trading. So there's been some recent stories, and you could say they drive clicks, but Trump's teleprompter guy was placing bets on Kalshi, allegedly earns over $100,000. This is one that's out in the open. Brian Armstrong, a CEO of Coinbase, trading. This is not insider trading. This is a troll. This is a different thing, a troll that he does. He's on a call, he's on an earnings call for Coinbase, and he sees there's a prediction market for what words he's going to say on the earnings call, and he says like, you know, before we end the call, I just want to say blockchain, staking, Web3, etc., to make sure that the... so he's moving a market, manipulating a market. And then just this week, George Santos settled with the CFTC, your regulator, for $35,000 following the finding that he'd been betting on his own attendance at the State of the Union in February while tweeting the opposite of his intent. Terrible. Yes. Yes. And honestly, I can't believe George Santos is still around. It's like he's on Cameo, he's on Kalshi. I don't know where this guy isn't. But how do you... like you have caught in these cases a teleprompter guy like that thing, you have caught them in other cases like congressional representatives and their staffers, you have banned them, barred from participating. When I look at this, I say, I see two things. I say, okay, Tarek, he's catching some people, you've got your own compliance, etc., people are going to get bored. Yeah, yeah, but you're catching some people, which is great, but I'm like, who isn't he catching? Who isn't he catching fast enough? It seems like a game of whack-a-mole, and the question is like, why not plug all the holes?
See, it started so nicely then you not going. I mean like Pakistani.
But no, because like here's... okay, a few things.
First of all, the fact that we caught the teleprompter guy and George Santos is like a... it's validation of our system, right? Like it's validation of the fact that, you know, whoever it is, no matter who it is, we're going to catch and enforce our rules uniformly and fairly.
How do we know who you don't catch?
Well, is it perfect? Probably not. But like here's the way that I would rephrase that question. Do you think that people inside trade the stock market?
Are they catching all of them?
So first what we need to do is like we need to first set the standard. But the point is like the standard cannot be are you catching everybody. The standard should be are you basically detecting and deterring.
Are you getting faster at catching people?
Yes. And we've always been pretty good. I think now we have more cases because we have so much trading activity. But this is the thing about prediction markets is honestly a blessing and a curse. It's a curse. It's very transparent. All my trading activity is public for everyone to see. Every time someone puts a trade, you can see it. You can go to kalshi.com, even if you're not a user, and see it.
See your username and what you're betting on.
Like see the trades immediately. And so...
I can see the trades, but I can't see your username.
Doesn't really matter because usually it looks weird.
It always looks weird. It like always looks like, you know, something is 10% and all of a sudden now someone is...
Buying in bulk. So, I mean, couldn't someone game it by buying slower?
It wouldn't be worth it. Like, this is the night like fraudsters usually they don't do it for $100.
They quick it out and they have a drive.
Why are you going to commit a financial crime? Like, you're going to commit a financial crime for 50 bucks. Like, you're not going to do that, right? Like, I mean, maybe you would, but like...
I mean, but I'm saying, but the point is it's so transparent, which is a curse because...
How much would you commit a financial crime?
I would not have committed a financial crime for [laughter] any amount of money because I think, you know, it never be. I would not. I before he's getting regular upfront. I'm a paranoid, I'm a risk-averse guy, I'm sure. But like the, but the point is like the, it's so transparent that like everyone sees it, which means that everyone will talk about it. But that's a good thing because the blessing is everyone sees it.
But everyone sees the stock market too. The market goes up and down.
Can you go anywhere right now to see all the trades that are happening?
I mean sure I could go sit in like the ticker at the NASDAQ and the...
I have a thing that you can put in a spreadsheet.
Yeah. Bloomberg terminal and see the thing.
No, that's just the hedge funds can see that. But you cannot as an individual without paying Bloomberg to do this.
Well, I mean I can't. Well, how am I going to afford? I have to pay $100,000 to get early access to Trump's Truth. How about then I got to get $200,000. Okay, this isn't an ad. This isn't an ad. But yes. Okay. So, I get your point that like you, but you guys are, you're getting faster. Who are you worried that you're not catching right now?
I just think it's like I didn't finish the point about George Soros when he did it or all these cases. Our users and our systems immediately flag it. They immediately say, 'Hey, something is weird there,' and so we catch it immediately. Literally 30% of our team is investigation and compliance.
How big is your team now?
We're like 200. But my point is like, and then you have to punish it very hard, like you have, and that's detecting, that's the case for all the financial markets. And when you do that, it's like you cannot catch all the crimes on the street, but when you catch a crime, you punish.
