The Prof G Pod with Scott Galloway First Time Founders with Ed Elson – How Kalshi Made it Legal to Bet on this Election
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Nov 3, 2024 Tarek Mansour, co-founder and CEO of Kalshi, shares insights into the innovative world of legal betting on elections. He reveals the challenges of creating a regulated marketplace amidst public skepticism and regulatory hurdles. The discussion highlights how prediction markets can offer more accurate forecasting than traditional polls. Mansour also reflects on his journey from MIT math enthusiast to entrepreneur, tackling the balance between ethics in betting and the potential benefits for voter engagement. It's an eye-opening look at the future of political predictions!
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Kalshi's Origin
- In 2016, Tarek Mansour observed at Goldman Sachs that high-net-worth individuals were more interested in betting on events like Brexit and the US election than in complex financial instruments.
- This sparked the idea for Kalshi, a platform for betting on future events.
Economic Value of Weather Predictions
- Tarek Mansour argues that weather predictions hold economic value, citing farmers' use of orange futures to forecast weather and residents of the Florida Keys using Kalshi to hedge against hurricane damage.
- This challenges the notion that prediction markets lack economic relevance outside of financial markets.
Artificial vs. Natural Risks
- Tarek Mansour highlights the distinction between betting on artificial risks (e.g., dice rolls) and natural risks (e.g., elections, hurricanes).
- He argues that natural risks create a need for markets to transfer risk, justifying the existence of prediction markets like Kalshi.