Kalshi cofounder Luana Lopes Lara discusses the prediction market’s rise, Sixers partnership, and affiliation with Donald Trump Jr.
Kalshi’s 30-year-old cofounder, a self-made billionaire from Brazil, also addresses concerns about insider trading and addiction.
How and where Americans could wager their money was forever changed in 2018. That spring, the U.S. Supreme Court overturned a federal law that had long limited legal sports betting to four states, and the sports gambling industry subsequently ballooned into a $166 billion behemoth. And 450 miles from Washington, D.C., the seeds of another seismic shift were quietly planted at the Massachusetts Institute of Technology, where Luana Lopes Lara met a fellow student, Tarek Mansour.
Lopes Lara and Mansour had each worked for Wall Street financial firms. The duo discussed creating something new — a platform where investors could trade on the predicted outcomes of specific events.
In 2020, the federal Commodity Futures Trading Commission approved their application to operate the prediction market Kalshi, and Lara and Mansour recruited investors to their fledgling enterprise.
“We took four years working with the federal government and figuring out how to launch this legally and in a regulated way,” Lopes Lara, a 30-year-old native of Brazil who holds the distinction of reportedly being the world’s youngest female self-made billionaire, said in a recent interview with The Inquirer.
In 2023, Kalshi sought permission from the CFTC to offer contracts on which political party would control Congress. The agency denied the request, arguing such wagering would be “contrary to the public interest.”
Kalshi sued the CFTC and prevailed, clearing a path for the company to accept wagers on political elections. Its customers went on to spend $1.3 billion trying to predict election outcomes in 2024, including the presidential contest between Donald Trump and Kamala Harris. (The recent midterms attracted $3 billion worth of wagers on the prediction market.)
Beyond elections, Kalshi offers a dizzying array of potential outcomes that anyone over 18 can stake their money upon: cryptocurrency values, oil futures, Rotten Tomatoes scores of new movies, words an Airbnb executive might mention during an earnings call, the weather in Philadelphia.
Sports contracts, though, have lifted the company into another stratosphere. During the 2026 FIFA World Cup, Kalshi collected about $27 billion in wagers. The company’s value subsequently soared from $22 billion to $40 billion, CNBC reported.
The NBA recently named Kalshi and its competitor, Polymarket, its preferred prediction markets. And the Philadelphia 76ers in late October became the first NBA team to enter into a separate multiyear partnership deal with Kalshi. The prediction market covered the cost of postgame rides on SEPTA’s Broad Street Subway line for fans who attended an Oct. 30 matchup between the Sixers and New York Knicks at Xfinity Mobile Arena.
The Inquirer is investigating how the rise of the multi-billion dollar sports gambling and prediction market industries are affecting public health and professional sports. Read more of our coverage:
· Bryce Harper addresses controversy over his video to FanDuel VIP bettor
· In Pennsylvania, the epicenter of online gambling, anger over addiction and loss fuels a backlash
· MLBPA supports banning players from promoting sportsbook VIP programs
· As the betting industry grows, kids as young as 11 are getting hooked
· He wrote the book on sports gambling's rise. Here's what he thinks you should know.
Kalshi’s leaders insist that prediction market trading is different than gambling with a sportsbook operator. For example, Kalshi recently contacted Philadelphia restaurant and bakery owners to see if they’d wager on a Nov. 8 Eagles game against the New York Giants to cover the cost of giveaways, like free meals for customers.
Yet there is a growing backlash to each industry’s growing omnipresence in daily life.
In March, Arizona’s attorney general filed criminal charges against the New York-based prediction market, accusing it of running an unlicensed online gambling operation. A federal judge later blocked the case from proceeding, ruling that prediction markets are solely regulated by the CFTC, News From The States reported.
That didn’t deter Utah’s attorney general in October from filing felony charges against Kalshi, Lopes Lara, and Mansour for allegedly violating the state’s gambling prohibition.
The company accused the state of “playing politics” and said it would put “a stop to this in court, just like we did in Arizona.”
Kalshi is also facing litigation in New York and other states over whether its business practices violate local gambling laws. Prediction markets are available in 50 states, but not taxed as steeply as sportsbooks, which have been legalized in 39 states and Washington, D.C. “We comply with all corporate tax laws and believe in responsible state taxation, even as a federally regulated derivatives exchange,” Lopes Lara said.
In early September, New Jersey Attorney General Jennifer Davenport petitioned the Supreme Court to decide whether states should have the authority to regulate prediction markets as they do gambling, an effort that has been supported by a bipartisan coalition of law enforcement officials, including Pennsylvania Attorney General Dave Sunday and the National Football League.
This interview has been edited and condensed for clarity.
Tell me about Kalshi’s early days.
Tarek and I both worked on Wall Street. We realized that most trading happens when people have some view about the future, some thesis about what’s going to happen.
And what we wanted to do is [create] a financial exchange, where instead of trading all these other assets, you just trade contracts, and buy and sell. Contracts are what’s going to happen in the future. Prediction markets are so much better at forecasting the future because of the wisdom of the crowds, and people putting their money where their mouth is.
When do you feel that this idea was actually viable?
After we won the lawsuit against the CFTC [which allowed Kalshi to offer contracts on the 2024 election], we realized how big it was going to be. Election markets are the holy grail of prediction markets. At the end of the day, it’s the thing that proves to people how important these markets are. You can see our data for 2028 [elections] are being used already on TV.
Former New Jersey Gov. Chris Christie and other critics have said that prediction markets are just another version of sports betting. Christie also said that companies like Kalshi market themselves to teens.
Chris Christie — who is paying him at the end of the day? He’s doing the work for the casino [industry], so obviously he’s going to say that, because they want to protect their monopolies.
With a sportsbook, the house always wins. The house will give you odds that they want to give you. There’s no transparency, no competition on whatever that odd is. And they make money when people lose. The more they get users to lose money, that’s exactly the amount of money they start making. And also, if you start winning, they cut you off.
Exchanges like Kalshi, we function like the New York Stock Exchange. What we do is we match buyers and sellers of contracts of what’s going to happen in the future.
In terms of advertising to minors, that’s completely false.
Advertising for sportsbooks and prediction markets have become inescapable at professional sports stadiums and during broadcasts of games. Leagues, franchises, and stars like LeBron James have entered into lucrative partnerships with those industries. But many fans — and even some athletes — are unhappy about this overlap. What’s your message to them?
People are entitled to their opinions. We think prediction markets are another way fans can engage with their teams.
(In a follow-up email, Kalshi declined to specify the value of its deal with the Sixers. A Sixers spokesperson also declined to provide those details.)
Donald Trump Jr. is a Kalshi adviser. What is his role?
(Note: Kalshi and Trump Jr. ended their affiliation on Thursday, with Kalshi citing his extensive investments in their rival, Polymarket.)
During the 2024 election [between Trump and Harris], all the polls were saying it was 50/50, who was going to win. Kalshi and Polymarket were saying that there was around a 65% chance that Trump was going to win. And I think with that, Don Jr., and the [Trump] family, and a lot of Republican leadership started seeing the value of these markets. [Trump Jr.] was such a big believer in the industry, and he wanted to get involved.
We always believed we wanted to be a bipartisan kind of company. We didn’t see it as any issue at the time — we’re just getting his help on marketing and all that. We never ask for anything, any favor, regulatory-wise. Nothing like that, whatsoever.
A White House teleprompter operator was caught earlier this year wagering about words that President Trump might mention in speeches, and a U.S. soldier was arrested for betting on military action in Venezuela. How do you address insider trading, or people trying to deliberately affect outcomes on prediction markets?
The second example you gave actually did not happen on Kalshi [it took place on Polymarket]. Because we’re federally regulated, we’re also prohibited from offering markets on war, terrorism, or assassination. So that specific incident was on an offshore platform that offer those.
Insider trading is prohibited on Kalshi, the same way that the New York Stock Exchange prohibits insider trading. It’s a hard problem to surveil for. We’re not claiming that this will never happen. What we’re claiming is that we have very, very good systems to detect and deter this.
Congress members have accused sportsbook companies of using VIP rewards — like personalized video greetings from athletes — to encourage customers to continue gambling. What customer loyalty rewards does Kalshi offer, and are they any different from the VIP benefits that sportsbooks offer?
Our VIP benefits are not based in any way on wins or losses. Kalshi has never sent videos from players [to customers].
We’ve done extensive reporting this year about sportsbook users who have developed gambling addictions. Don’t prediction markets have the same potential to be addictive or harmful?
I totally hear your concern. It’s something we take very seriously. I think there are a lot of customer protection rules, in the CFTC and SEC, that we apply to us. And we do all of the customer protection mechanisms that the traditional sportsbooks or casinos do, including self-exclusion, even mental health support, deposit limits, screen time limits. We’re actually pro-more regulation.
I think the biggest difference is our incentives are aligned with our users. For us, someone coming and losing — we don’t make more money if people lose more. I think that we as a company don’t have an incentive to have people addicted to Kalshi, where sportsbooks and casinos, they have that incentive.
The Inquirer will continue to report on issues related to the growth of gambling addiction — among teens and adults — across Pennsylvania. If you or someone you know wants to speak with a reporter, please contact David Gambacorta or William Bender at dgambacorta@inquirer.com and wbender@inquirer.com
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