When prediction markets were little more than an idea on Wall Street, Kalshi Inc. co-founder Luana Lopes Lara found inspiration in an unlikely place: the womb of Kylie Jenner.
It was early 2018 and the internet was abuzz with speculation as to whether Jenner, the reality TV star-turned-cosmetics-founder, was with child. Lopes Lara was interning at Five Rings, a New York trading firm, learning the art of making markets. She asked her peers what they thought of the hype — sensing an opportunity to create a novel wager — but none of the other interns had even heard of Jenner.
“I was the only person that was like, ‘Oh my god, I think she’s pregnant. Look at these things on Instagram,’” Lopes Lara said in an interview from Kalshi’s airy, white-walled Manhattan office. “I was like, ‘I want to make a bet with you on this.’” (It turned out Jenner was, in fact, pregnant, which was kept hidden until after her daughter’s birth.)
The moment stuck with Lopes Lara — not the gossip, but the idea that millions of people might be forming strong opinions on uncertain outcomes, with nowhere to put their conviction.
It helped forge her career path, leading Lopes Lara to start Kalshi with her college classmate, Tarek Mansour, later that year. At 30, she is now one of the world’s youngest female self-made billionaires, with a net worth of $2.6 billion. She is driven by a vision that we should, essentially, be able to bet on anything.
Kalshi’s rapid growth
As Kalshi’s chief operating officer, much of the business is Lopes Lara’s responsibility. She oversees engineering, market listings andliquidity partners, among other areas, while also interviewing most new hires. It may sound like standard fare for the COO of a startup, but Kalshi has grown at a tremendous pace in the past year as prediction markets gained popularity. It has also faced serious political and regulatory backlash along the way.
Kalshi was valued at $22 billion in its latest funding round, double what investors pegged the company at in December. It employs 150 people, up from just 35 staffers a year ago.
As fast as Kalshi has grown, its controversies have piled up. Nearly all of them stem from a feeling among a not-insignificant faction of lawmakers, customers and conscientious observers that Kalshi and its chief rival, Polymarket, are doing something wrong.
Some critics say allowing bets on certain events — like international trade deals, who will run for officeor even Super Bowl attendees — opens up too many opportunities for insiders to benefit. Others point to ethical issues of trading on topics such as war or death, neither of which are explicitly allowed on Kalshi.
In February, as war broke out in Iran, a Kalshi market tracking the odds of Ali Khamenei being ousted as the country’s Supreme Leader began to jump. He had been killed in the bombing, but instead of resolving the market to “Yes,” Kalshi froze it. His death technically made the contract invalid. Meanwhile, Polymarket faced accusations of facilitating insider trading.
None of it reflected well on the industry.
“It’s always very stressful to read these things,” Lopes Lara said when asked about the customer backlash. “That’s where we really failed. We didn’t fail on market design, we didn’t fail on the rules. We failed in making it crystal clear to people.”
In the end, Kalshi pledged to improve how it communicates its rules in the event of a death, reimbursing all fees and net losses from the Khamenei market to the tune of $2.2 million.
The company’s dominance in sports markets has also come under scrutiny, as more workaday gamblers enter the platform.
Sports wagers accounted for around 80% of Kalshi’s event-contract trading volume in recent days when including combination bets that have multiple components, according to a company spokesperson. That figure reflects not just the platform’s growing popularity but the demand generated by frenzied rivalries across football, baseball, basketball and soccer leagues.
Kalshi handled a record $17.9 billion in overall notional trading volume last month, according to user-compiled data from Dune Analytics.
“What was once limited to a handful of locations is now available in almost every corner of the country — often right on a cellphone,” Republican Senator Marsha Blackburn of Tennessee said at a May 20 Senate hearing about Kalshi’s industry. “While prediction markets represent financial innovation across sectors, there are real concerns that they function much like traditional sports betting without the enforcement of state regulators and attorneys general.”
Early Riser
Lopes Lara grew up in Brazil and trained as a ballerina before pursuing her business career. Back then, she would measure her food intake down to one-quarter of a strawberry, she once told Bloomberg Radio. These days she remains in good shape but her diet is far less restrictive: a steak bowl from Chipotle is one of her favorite foods, with rice, cheese, no beans, and chips crunched up and sprinkled on top.
She ordered it regularly when Kalshi was fighting with its regulator, the Commodity Futures Trading Commission, during the Biden administration. The CFTC had challenged Kalshi over whether it could offer contracts tied to congressional races, leading the company to sue the watchdog in 2023. Kalshi won its case just in time for the 2024 election.
The Trump White House has been kinder, but Kalshi has still faced legal skirmishes in at least 19 states that have contested its right to offer sports bets and more to their constituents. In Arizona, it resulted in criminal charges against the company.
Kalshi is not afraid to pursue these court battles all the way to the top, according to Lopes Lara.
“If it needs to go to the Supreme Court, it can go to the Supreme Court,” she said at a company event in March. “We’re very, very confident that we’re correct and there’s no problem with that. And we’re no stranger to lawsuits either.”
Lopes Lara is planning her wedding celebration in Iceland next year. She has a golden retriever named Lola whom she dotes on, and adheres religiously to a daily schedule described as follows: wake up at 5:45 a.m., spend an hour at the gym, then work from Kalshi’s office in New York’s Meatpacking District til 10 or 11 p.m.
Colleagues say her uniform there is casual: often Kalshi-branded gear, sometimes a T-shirt for history buffs from a website called Echos of Antiquity, and sneakers. She rarely wears makeup and said she doesn’t own a designer purse.
The office itself is sprinkled with inside jokes and nods to Kalshi’s growing presence in mainstream society and among celebrities. There is a framed photo of actors Eddie Murphy and Dan Aykroyd from the 1983 movie “Trading Places,” referencing a more recentrule that bans insider trading. Elsewhere is an image of a “South Park” episode that portrays prediction markets as corrupt, but also reflects a kind of zeitgeist around the industry in popular culture.
A clip from outside Madison Square Garden that recently went viral during NBA Finals — with a fan saying, “My mayor Muslim. My bagels Jewish. My Christian Dior. Knicks in four!” — was spoken into a Kalshi-branded microphone. Kalshi recently inked a multi-year deal with the arena, taking over the sixth-floor concourse. And, Jenner’s current boyfriend, actor Timothée Chalamet, is a devoted Knicks fan who just signed his own advertising deal with Kalshi. The two have been firmly seated courtside rooting for his home team.
It is all part of a grand scheme for Kalshi to become a name that’s embedded in regular conversation for more people, rather than a startup doing unusual things. Its name means “everything” in Arabic.
“My role in the company is to push for us to go for things, to go fast, take what we can and grow as much as we can,” Lopes Lara said.
Front-Row Student
Lopes Lara launched Kalshi alongside Mansour,the company’s chief executive officer, as part of a Silicon Valley hackathon. The two met while earning engineering degrees at Massachusetts Institute of Technology, where they became inseparable, according to one of their professors.
“She sat in the front row of every class,” said Peter Kempthorne, who taught statistics to them both. “With many students at MIT, they may not be engaged in the lectures, but she was totally engaged in trying to learn as much as she could.”
Lopes Lara focused on how she could apply new technologies like machine learning to classic statistical ideas, Kempthorne said. Later, she and Mansour forged deeper ties at internships together, including at Five Rings and then Citadel, where the hedge fund offered a two-hour training session on prediction markets.
“We saw all aspects and sides of prediction markets that we liked,” Lopes Lara said. “That was just one of the reasons we decided to say, ‘let’s drop our extremely high-paying jobs and we’ll try to do this thing.’”
By all accounts, they are very different people. While Mansour is usually the public face of Kalshi —meeting with investors, appearing on TV or hobnobbing with policymakers —it’s Lopes Lara who’s running the company behind the scenes. Her daily tasks can vary wildly, though she spends a lot of time with markets staff going over the bets Kalshi chooses to list and how to make the operation more efficient.
Kalshi has more than 500 templates for wagers that have already been worked through by that team. They reflect the exchange’s own forecasts for everything that could possibly happen in the world.
Those predictions then generate regulated contracts to match particular outcomes. The company is constantly reviewing requests from users and scanning social-media platforms for new topics. It uses an internally developed artificial-intelligence model to aggregate the day’s top news, analyze competitors and make other recommendations.
“We think about markets almost like a factory,” Lopes Lara said. She plans to hire another 50 people by year-end, noting that “nowadays with AI, every engineer is like five.”
New Business
Lopes Lara has her eyes set on a few key goals as Kalshi continues to grow and develop. The company has a loyal retail following — some 2 million strong — but needs to expand in the institutional space, as well as abroad.
Its next big upgrade will be margin trading, something Kalshi expects to unveil later this year. That, combined withits new block-trading effort, is squarely aimed at big-money traders who work in hedge funds, corporations or other professional entities.
Its effort to grow overseas is trickier.
Kalshi’s first international effort centered on Brazil through a partnership with local brokerage XP Inc.announced in March. The next month, Brazil’s government moved to ban access to prediction markets sites over illegal-gambling concerns. The reception has been similar in many other countries, where governments have ruled that prediction markets are not an innovation in financial derivatives trading —as proprietors say —but gambling, pure and simple.
Lopes Lara meets with Kalshi’s legal team every week to examine strategies and outcomes. Kalshi will never apply for a gambling license, she said, even if that would allow access to key markets where it’s currently restricted, like the UK and parts of Europe.
“We want to have one core exchange and clearinghouse that concentrates all the liquidity,” she said. Fragmented markets, where traders can only be matched against others in their region, is out of the question.
Jay-Z Ties
Kalshi undoubtedly has some friends in high places helping it carve a path forward.
Donald Trump Jr. is an adviser to the company, though Lopes Lara stressedthat the president’s son is not involved in any regulatory discussions. There is also Jay-Z, the businessman musician, who is an adviser and an investor through MarcyPen, the venture capital firm he co-founded. His ties to Kalshi haven’t been previously reported.
When Jay-Z visited the company’s offices earlier this year, staff asked him for advice about Kalshi’s markets related to music, Lopes Lara said.
While she can’t trade on Kalshi herself due to company rules, Lopes Lara sometimes imagines how she would. In planning an outdoor wedding, for example, one of her immediate thoughts was to create a market for whether it would rain that day.
“We can plan all these things outside, but it starts raining, you move it inside and you’ve spent all this cost for the outside,” she said. “As prediction markets become more mainstream and people accept them and understand them, we’re going to see a lot more of those use cases.”
