Kalshi Co-Founders Defend Prediction Market Model Amid Competitor Growth
As Kalshi claims the title of the world's largest prediction market, its expansion into US regulated event contracts raises unresolved questions about market structure, investor protection, and...
Kalshi, the New York-based prediction market platform co-founded by Tarek Mansour and Luana Lopes Lara, is currently at the center of a public debate over the legitimacy and societal impact of event-contract trading in the United States, according to a Bloomberg report published October 28, 2026.
The company operates as a federally regulated exchange, having received designation from the Commodity Futures Trading Commission (CFTC) in 2020. That regulatory status distinguishes Kalshi from offshore competitors and from unregulated platforms, because CFTC-designated contract markets must comply with core principles covering financial integrity, prevention of market manipulation, and customer protections under the Commodity Exchange Act.
Bloomberg described Kalshi as the largest prediction market in the world by the time of the report, though the publication did not specify the metric used, whether trading volume, open interest, number of contracts, or registered users. What would clarify that ranking is a disclosure of audited trading volume figures, which Kalshi has not made publicly available as of the date of this article.
The platform allows users to trade binary contracts on the outcome of future events, including economic indicators, political outcomes, and weather events. A contract pays out a fixed amount if the event occurs and nothing if it does not. Participants can take positions on either side of the outcome, functioning mechanically like a futures contract with a binary payoff structure.
Kalshi's CFTC authorization has not insulated it from criticism. Vocal opponents cited in the Bloomberg report have raised concerns about what the platform actually is: a financial hedging tool, a form of gambling, or a source of real-time information aggregation. The CFTC itself has previously litigated over the boundaries of permissible event contracts. In 2023, a federal court ruled in Kalshi's favor when the CFTC had sought to block the company from listing contracts tied to congressional control, a decision that expanded the scope of what event contracts can legally reference in the United States.
The competitive landscape has changed materially since that ruling. The Bloomberg report notes that Kalshi now faces a host of new competitors, though it does not name them or provide their market share data. Polymarket, a decentralized platform that operates outside US jurisdiction and does not accept US residents as users under its terms of service, has drawn significant global trading volume. PredictIt, operated under a no-action letter from the CFTC for academic research purposes, has faced its own regulatory uncertainty. Neither competitor holds the same full CFTC exchange designation as Kalshi.
For US investors and market participants, the distinction matters. CFTC-regulated contract markets are required to maintain sufficient capital, segregate customer funds, and submit to routine examination. Platforms operating outside that framework do not carry those obligations, which affects the counterparty risk profile for participants.
The economic case for prediction markets rests partly on the theory that prices in liquid markets aggregate dispersed information efficiently. Academic research on this question is mixed. Iowa Electronic Markets, operated by the University of Iowa, has produced peer-reviewed studies showing that its political event contracts have historically outperformed polling averages in certain election forecasts, though that platform limits positions to $500 per participant and operates under an academic exemption, not commercial scale.
The Bloomberg report does not disclose Kalshi's revenue, number of active users, or total notional value of contracts outstanding. Kalshi is a private company and is not required to file financial disclosures with the SEC. What would reveal its financial scale is either a voluntary disclosure, a future IPO registration statement, or a CFTC examination report, none of which have been made public.
Mansour and Lopes Lara participated in the Bloomberg segment, which was filmed on location in New York. The founders' public posture, as described by Bloomberg, is that prediction markets serve a legitimate economic function by letting businesses and individuals hedge against uncertain outcomes. Critics counter that binary event contracts on political or social outcomes create incentive structures that could distort behavior by parties with both a financial stake and the ability to influence results.
The CFTC has not issued updated guidance specifically addressing the expansion of commercial prediction markets since the 2023 court ruling. Any future rulemaking or no-action letter from the agency would be the primary regulatory signal for how this market segment is permitted to grow. For now, Kalshi's model remains legal, federally supervised, and actively contested in the public arena. See the full Bloomberg report for additional detail on the founders' comments.