Pricing the Future: A Conversation with Tarek Mansour, CEO & Founder, Kalshi | DC Fintech Week 2026

Thanks for having me.

I love that you're, you know, a law professor that you're using the opinion from a court that's...

We all have opinions, but the law is the law, you know.

Appalling crime against the state, crime against humanity. This gambling, this like gambling is happening on the Chicago Board of Trade. Oh my god, it is horrible. And the point is, I mean, you know, what's interesting about the history of these markets, the history of the commodities markets, is it's always had this flirtatious and complicated relationship with gambling. It has, it's always had it. You know, onions are banned because, you know, at some point two guys cornered the onion market and, you know, Congress decided that, you know, onions are the problem, not humans. I mean, so where are we? I mean, so why has this whole energy been sort of oscillating and sort of dancing around prediction markets? Because speculation looks and feels like gambling. It quacks like a duck and looks like a duck. And so how do we draw the line? Like, what is sort of some sensible line that is to be drawn? And the line has been pretty consistently drawn around the business model. It's like, because if speculation, if the act of staking some money to make more money on something you don't control is the way you're going to define gambling, then, you know, well, everything we're talking about here is gambling. So the line has been drawn around the business model. Are you a bucket shop or are you a sports book or are you a casino where you're setting the lines in a way that's generally adverse to your customers? And the purpose of that whole activity, the sole purpose is, you know, for a transfer of wealth from people to the casino. And you're, you know, if you're a smart user, if you're doing research and you're accurate, you got kicked out of the casino. And if you're someone who loses money over time, you know, you figure out how to kind of bring you back and make you lose more. That's what the bucket shops used to do at the time when the court cases were saying, 'Well, what's the difference between the Chicago Board of Trade and the bucket shops? They're both letting farmers speculate on the price of grain.' Well, the difference is the Chicago Board of Trade functions as an open competitive marketplace where the prices are set by their participants in a transparent place. And I think the thing that's important here is markets, what they do, reward, they do reward the card counters. We want efficient prices. We want efficient markets. You want accurate prices. And those charts that you see around from Kalshi and prediction markets often about, you know, what's going to happen in different things, they would not exist if we didn't have sophisticated trading that was basically happening over time. And the interesting thing about, you know, how this whole thing evolved and the way that when the Commodity Exchange Act came around, it actually came around to preempt two forms of laws, state insurance laws and then state gaming laws, to enable this idea of like, okay, if something is traded on a national exchange and it promotes price discovery, it makes us smarter about some sort of thing, we're going to create a uniform set of rules across all 50 states that, you know, enable participants from New York to trade against California and California against Kansas, and we foster kind of a global liquidity pool for these markets to exist. So it's a very complicated way to get to the answer of, you know, why prediction markets are not gambling.

Well, that's illegal.

After the sports fight, I've been saying I want to go repeal the Onion Act. So, you know, if anyone is interested, ping me about that. But...

Well, this is... that's... yeah, I will not take a controversial position on onions right now, sir. But, you know...

So, to me, the business we're in, and really I think that's true for any exchange, whether prediction markets or stock market or exchanges in general. I mean, in some ways you could think of the stock market as like a special case, like a special subset of prediction markets, because the thing that these markets do is price discovery. That's the core. You know, you're trying to figure out the fair value of something. What is this stock worth? What is this bond worth? What is this, you know, form of metal or type of metal worth? In our case, it's like, what is this event worth? Like, what is this risk priced at right now? You know, whether it's 10% chance of a hurricane somewhere or, you know, the probability of the Democrats taking over the Senate, right? And all these markets, the core foundational purpose is price discovery. And what really is price discovery? It's a sort of, you know, adjustment, continuous real-time adjustment of the crowds to new and incoming information. And, you know, you think something is a little bit overpriced, you sell it, and if something is a little bit underpriced, you buy it. And that sort of constant competitive dynamic trading, you know, gives us a public good, which is the price of something. And so to me, when you ask the question, I always think about what are the things we should price, like what are the things that are questions are important or assets that we haven't really quite predicted where it's going. And so to me, AI is inevitable right now. I think a lot about that, you know, could we sort of start establishing markets on, you know, compute is a great example. There's a lot of issues in that market, but I think figuring out where the, think of a little bit like a yield curve or like a forward curve for compute over time of where it's going to be over the next few years. I think that's going to be extremely consequential for the AI economy. The challenges in that industry, I mean, right now is like, which is a little bit interesting. It's not new either. I mean, really when you look at a commodity market, everything kind of repeats itself. What is compute? We don't have a unit yet, which is the same with grain. You know, when grain futures came around at the beginning, the problem was, you know, you had like a sack of grain from this farm and a sack of grain from the other. We hadn't, there was no uniformity, but I think it's a matter of time till that happens.

I mean, you know, a lot of the ideas come from our team, but really most of them come from customers. I mean, it's very, I mean, it's part of, in some ways, the way to think about it, like historically, I think the market generation was like a push. It's like, you know, you have a team of strategists at some of the legacy exchanges that sit in a room and they come up with a genius idea and, you know, this is the product that's going to work. They go out, market it for 18 months and they launch it and it usually tanks. And you can look at the data, like out of, you know, you could look at this on CME and see what, like, if you look at the kind of number of products that are launched over time and what percentage of them end up actually being successful, it's a very small percentage, which tells me that maybe the strategists are not very good at their job, right? And I'm not a strategist. I'm not better, to be clear. Like, I'm not claiming that I'm, I'm probably not, certainly not. But the thing that we tried to do at Kalshi, and really I think the value of what we built is we built a mechanism that is more general purpose. It is something that you can ask a question, whether it's like, you know, will the election go one way or the other, or will it rain tomorrow, or, you know, where's the price of something going, like a traditional financial market. And we have built the technology, the operations, regulatory infrastructure to be able to price these things very quickly. We have a now hive mind where we can trade on any question fast. But maybe just to like, the point is we want to move it to a pool where like the customers are the ones that are driving their innovation in the markets and we're kind of following where the customer demand is over time. And what are the like, and right now the pull from AI is quite strong and that's where we're being sort of driven into.

You know, the surprising answer is not really. I mean, like it's a little bit like, you know, asking the NASDAQ, like, you know, how do you feel about, you know, the SEC chairmanship changing every four years? I mean, I don't know. I don't know what Adena would say, but like, what is the alternative? I mean, you know, what is the alternative? We sell the New York Stock Exchange so that you can only buy stock, Apple stock in DC from other people in DC. That wouldn't make much sense. I mean, that's the reason we have a uniform set of rules across all 50 states, because otherwise exchanges like multilateral execution facilities could not foster like that, you could not move because you wouldn't have enough liquidity for anything. I don't know. I mean, I think when we started the company, like, you know, the first principle we defined, so we, you know, we went to Y Combinator, the Starbucks in Silicon Valley, that was in 2018, at the end of 2018. And then, you know, at the time, like, you know, the consensus, the Paul Graham, do like all the startup 101 way of doing things is like move fast and break things, like push regulation as far away as possible. That's how Meta got big, Uber, Airbnb. I mean, that is the playbook. Just get super big and then figure out how to get regulated. But like, move, move it, build products people want, and then things will take care of themselves. I didn't really like that. Like, I, you know, a bunch of things in my background that make me a little bit paranoid in nature. I was born, I grew up in Lebanon, and, you know, Lebanon was like a show of a country, but like, it's an amazing country. You should visit it, maybe after the show calms down. But like, I'll take you there if you want to go, but after the show calms down. But, you know, I've seen how things go wrong in many ways, and like, grew up a single mom, that sort of stuff, that sort of anxiety never leaves you. And the first principle we sort of defined at the company is regulatory first. Like, it's like, we are going to do it our own way, and we're going to just actually start with the regulatory piece. And that's why you see as a CEO, like, I'm super intimately familiar with the Commodity Exchange Act, with the laws, the rules, because I spent the first four years of the company just doing reg. And when I looked at it really clearly, like, where does this fit? It really elegantly fit under the definition of a commodity. The Commodity Exchange Act is a truly beautiful statute. And the more I like talk to people about it, I realize most people haven't actually read it. All the lawyers are, you know, punditing on Twitter and LinkedIn about our laws, like whatever the cases and all the litigation is happening, they have no idea what they're talking about. They haven't even read the statute. I don't even think they're reading the opinions. Like, but if you read the statute, I encourage you, you know, go read section 565C and how it was really elegantly written. It's a statute that has sort of left itself, and there's a bunch of stuff that's a complete mess, like the onions and stuff like that. But like, you know, the usual, but there, the way I view it is like it left room for innovation to kind of mold itself with the economy as it evolves. We were in an agriculture-based economy. We had agricultural-based futures, and we moved to metals and oil, then intangibles like interest rate swaps, etc., which we would have never thought about in the '90s or, sorry, 1890s. And now we're sort of in this sort of economy where everything, you know, we're exposed to geopolitics, to like all these different events. And but it has guardrails that sort of translate across different assets, like market manipulation. How do you define it? Well, the definition of the two dudes that manipulated the onion markets, they could do the same thing on our political markets today. And the way you handle it is actually very similar, you know, and so maybe all this is to say is like this, the federal structure that was enacted for these actually fits quite neatly for prediction markets. That doesn't mean we don't need to evolve it. I think there's some things we need to do on customer protection, the bans on insider trading that we've been advocating for in DC, and so on and so forth. But I don't see any other way. It's not a choice of like state versus federal. I think it's a choice of whether prediction markets exist in the US or they go offshore. They go back to being offshore, really.

It's a great question. I mean, I think that there's a lot of similarities. It's actually pretty similar. I would say there's some pros and cons of prediction markets. The pro of prediction markets is the surface area. There's just more events, more topics. So there's in some ways more surface area for material nonpublic information. But the flip side of it is actually it's more direct. So it's much easier to bring a case. It just tends to look very blatant when it happens on a prediction market. So, and I'll give you a simple example. So, you know, if someone right now, you have a cousin that works at Tesla, and that cousin sort of gives you the exact number in the next quarterly earnings on how many deliveries Tesla is going to have in their next sort of earnings report. You have two options. Either you buy some options, some call options on Tesla, or you literally just go to Kalshi and buy the exact numbers on the quarterly earnings, like on how many deliveries are going to. The second one looks much more suspicious. It is very blatant in its nature, right? And if you hit the number more cleanly, generally it's much easier for us to establish a fact pattern that there was some insider trading here. Whereas the option, you could always say, well, I don't know, like Elon looked cool today, so I decided to, you know, rip a bunch of call options. There could be many different reasons for why he did it that is not specifically that piece of insider information that you got. And I think that's very important because I think what's, it's kind of a blessing and a curse for prediction markets. It's like because of all of our activity is super transparent. You can always see all the trades and all of that. When someone commits fraud, everybody sees it. So the press is going to, you know, love reporting on it, but that's also a blessing because everybody sees it. So you're committing crime in broad daylight, and that makes it so much easier to kind of police that sort of activity. And I, I mean, I'll talk a little about the layers. So first, customer verification. This is where I differ with some of the competition in the space. Like I think everything with these things needs to start with proper KYC. You have to know who the customers are, you know, what they come from, you have to check where they work, all these different things. Then I think you have comprehensive surveillance regime. Some of it is really mimic that to the NASDAQ. We actually do use NASDAQ for some of it. But suspicious patterns. Usually when people commit fraud, there's something suspicious. It's like something is trading at 10%, all of a sudden an account is now buying in bulk that never really buy it at that size. What's going on these transactions? It raises flags, and then you, you know, you can investigate and you can impose fines all the way to criminal prosecution. The last thing that's very important about our model is that everything is very transparent. So the users often send us whistleblower complaints because they're in the markets. They usually see the suspicious pattern. So when George Santos, you know, he got out of jail, decided the first thing he wants to do is commit crime again, he like, you know, decided to insider trade on Kalshi. Within a few minutes, we had 100 whistleblower complaints being like, something is weird here. You know, we caught it. That's helped a lot. But I think there's going to be maturity, like more maturing of the infrastructure around there, which is very exciting. There's a lot of vendors now that are being built and more collaboration with the agencies. So I'm very, very excited about the sort of direction of travel.