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

By Stripe

Categories: Product, Startup

Summary

Kalshi built the first CFTC-approved prediction market by choosing regulatory compliance over growth, spending 3 years pre-launch and turning down the offshore path—then proved the strategy right by trading $10B+ monthly and winning a major election lawsuit in 2024.

Key Takeaways

1. Choose the hardest problem first: Kalshi identified 'Can we do this legally in the US?' as the biggest blocker, not market growth, and solved regulatory approval before launch despite competitors going offshore.
2. Financial services and healthcare require 'ask permission' not 'ask forgiveness'—FTX-style failures prove you cannot retroactively structure money movement or high-risk industries without upfront regulatory frameworks.
3. Individual contract approval model: Every single prediction market contract requires CFTC filing with 24-hour review window, creating real-time regulatory oversight rather than blanket approval.
4. Co-founder balance thesis: Pair an optimistic risk-taker with a paranoid expected-value calculator (trader mindset). This split prevents blind spots and creates sustainable decision-making frameworks.
5. Timeline reality check: 3 years from YC 2019 to regulated launch (2022), then 2 more years to winning an election lawsuit (end of 2024). Legal clarity compounds growth—not a 6-month regulatory process.

Topics

• CFTC Regulatory Approval Strategy
• Prediction Markets Compliance
• Financial Services Go-to-Market
• Regulatory vs. Ask-Forgiveness Models
• Co-founder Dynamics and Risk Management

Transcript Excerpt

I brought some Brazilian beers. I'm going to try a Brazilian beer then. Do you want a Brazilian beer or Guinness? Well, I think I need to have Guinness. You need to have Guinness, that is true. Ok. We lost Tarek already. It's been like one minute. Tarek Mansour and Luana Lara are cofounders of Kalshi, one of the new prediction market firms that rose to prominence in the November '24 elections. They spent four years pre-launch fighting for regulatory approval to build the first onshore prediction...