Tarek Mansour has worked in finance at firms such as Goldman Sachs and Citadel before launching the fintech startup Kalshi. Kalshi, which is the first regulated exchange, focuses on “event contracts” that allow trading on current affairs like national elections.
With the 2024 United States presidential election approaching and with the current Republican control in the House of Representatives being razor-thin, platforms like Kalshi, PredictIt, Polymarket, and Smarkets have come under scrutiny for allowing financial bets that some critics worry could influence voters.
Kalshi’s product, which is more closely aligned with commodity trading, allows consumers to trade event contracts on various current events and disasters, such as COVID-19 and natural disasters. While event contracts on Kalshi are generally less than a dollar, prices can vary across the sector.
The idea of allowing financial bets on elections has sparked widespread concerns about the integrity of the electoral process. Last year, Kalshi’s proposal to trade contracts during elections was met with backlash, primarily from progressive politicians who urged the Commodity Futures Trading Commission (CFTC) to reject the proposal.
Despite the backlash, Kalshi filed a lawsuit challenging the CFTC’s decision, indicating a potential legal battle over the issue.
Platforms like Kalshi are not the first to face such opposition. PredictIt and Polymarket have also faced regulatory challenges.
However, proponents of event prediction markets argue that they are important tools for forecasting elections and current affairs, rather than tools for swaying votes.
The controversy surrounding these platforms comes at a time of increased polarization and distrust in US elections, with some people, including former President Donald Trump and his supporters, asserting unfounded claims of electoral fraud.
Despite the criticisms, platforms like Kalshi maintain that their products provide valuable forecasting tools and do not significantly influence election outcomes.