This is an excerpt from Sources by Alex Heath, a newsletter about AI and the tech industry, delivered only to The Verge subscribers once a week.
At 8 p.m. on election night in New York, I arrived at an unmarked office building in the Meatpacking District.
Inside, a few dozen young Kalshi employees moved between clusters of desks, pizza boxes and a large projector live-streaming the day’s key racing markets. The atmosphere was calm but focused. On the screen, numbers flashed as bets were adjusted in real time.
Near the projector, co-founders Tarek Mansour and Luana Lopes Lara chatted with a CBS News crew filming a segment for the next morning. CBS had just announced the Virginia gubernatorial race. Mansour pointed out that the Kalshi market had predicted the result almost an hour earlier.
“We are now doing $1 billion in trading volume per week.”
I was expecting a trading room atmosphere. Instead, the office seemed quiet. “I think it’s quieter than usual because there’s less volatility on this one,” Mansour told me later from a small conference room. The New York City mayoral race has long been considered a landslide. Zohran Mamdani had about a 95 percent chance of winning against Kalshi (and his rival Polymarket) even before voting closed. Still, about $100 million in transactions on the New York race went through Kalshi that day.
In recent months, I have followed the rise of predictive markets and particularly Kalshi. Although it is federally licensed and much larger than Polymarket, it is the latter that dominates the conversation in tech circles. Mansour wants to change that.
“Kalshi is probably one of the – maybe THE “The fastest growing companies in America this year,” he told me. “We are now doing $1 billion in trading volume per week.” Last year, the company took in just $300 million for the entire year. Mansour declined to share revenue figures, but even with fees of 1 to 2 percent per transaction, the math suggests business is booming.
Three factors fueled that growth this year: obtaining a federal operating license, expanding sports betting, and partnering with Robinhood to power prediction markets. If sport is a major attraction, Mansour’s ambitions go well beyond that.
“I think prediction markets are the next generation of the stock market,” he said. “They have media consequences. Everyone is an expert on the subject, everyone has opinions. These markets give a price to these opinions.”
Kalshi announced the race for New Jersey governor 32 minutes before any media
He hinted at new media partnerships and even tie-ins with entertainment events. “We will do a lot with the news networks in the coming months,” he said. “If the truth from these markets becomes commonplace, we will have almost achieved our mission. »
Given the novelty of prediction markets, Kalshi and Polymarket have yet to prove that they can remain reliable sources for predicting elections. Fox News took a reputational hit for accidentally calling Arizona for Joe Biden too early in 2020. Meanwhile, Kalshi and Polymarket boast about calling races before the results were even in. If one of them is wrong in a key race, it could call into question the legitimacy of prediction markets.
Less than an hour before the polls closed, Mansour showed me the Kalshi data from the New York mayoral race. City voters were buying Andrew Cuomo’s contracts more, but Mamdani dominated elsewhere. He won among women and young traders; Cuomo’s support was older and more male.
As we spoke, Kalshi called the New Jersey governor’s race at 8:20 p.m., 32 minutes before any media outlets. Mansour compared Kalshi’s role to that of financial markets: “Should the stock market replace bank analysts? No. Analysts provide input and the market finds the real price. We do the same for events.”
I asked if people were constantly texting him for predictions, especially on election night. He laughed. “Yeah. But I tell them: look at the market. I don’t have any additional information.”
As 9 p.m. approached, I assumed he would stay in the office until the polls closed. But as I got into my Uber, I saw him run out and get into another car on the street.
He didn’t need to wait. Kalshi announced the New York race for Mamdani one minute after polls closed and 36 minutes before any media outlets.
