The Kalshi-fication of everything

For many people, the first time they thought about Kalshi—a prediction market where you can place bets on the outcomes of sports, politics, culture, weather, and much more—was after a video clip of its cofounder, Tarek Mansour, went viral last week. 

Speaking on stage at the Citadel Securities Future of Global Markets Conference, the moderator Molly O’Shea asked, “Tarek, you’ve mentioned multiple times that you think prediction markets will be bigger than the stock market. What is it going to take to become a $1 trillion asset class?” In response, Mansour said, “You know, ‘Kalshi’ is ‘everything’ in Arabic. The long-term vision is to financialize everything and create a tradeable asset out of any difference in opinion.” The market impact of a “general-purpose exchange” capable of settling differences of opinion, he added, would be “quite massive.”

With the launch of Kalshi in 2018, and its main competitor Polymarket in 2020, prediction markets have gone mainstream in a major way. The potential for making profit by owning the market where every opinion and event is financialized also explains why Kalshi has just raised another $1 billion in its third fundraising round this year alone. Investors are hungry for new ways to take advantage of the explosive rise of gambling, technologies that create addictive behavior loops, and economic conditions where people are desperate enough to bet their rent money on if Trump will release the Epstein Files.

Kalshi sits between Las Vegas and Wall Street. A platform like FanDuel helps you gamble on every aspect of a game, and a platform like Robinhood helps you day-trade with complex options—all while sitting on your couch. Kalshi is designed to take this same logic and apply it to everything imaginable.  

This is a bizarre vision, one that views all the world as a casino and all its people as players. It treats the proliferation of sports betting as a model for all human interactions. It’s not enough to gamble on the outcome of a game. You should also be placing bets based on every opinion you have. (After all, do you really believe it’s going to be sunny today if you don’t put money on it?) 

For Kalshi, holding these opinions to yourself deprives the world of another asset that can be exploited for financial gain. 

A neutral intermediary

Here’s how it works. As a prediction market, Kalshi lets you buy “events contracts” based on the outcome of events in the world. You either buy a YES contract or NO contract based on if you think the event will happen. The price of each contract changes based on the dynamic odds at the time. 

For example, on Kalshi’s trending page at time of writing, I can place a bet on who will be named “Time’s Person of the Year for 2025.” The leading contender is “AI,” with a YES contract priced at $0.42 and a NO contract at $0.59. If the event happens, then I get $1.00 for every YES contract I bought; if the event does not happen, I get $1.00 for every NO contract. The odds change in real-time based on the volume of bets (or predictions) for specific outcomes placed in the event’s market through these contracts. Currently the total volume of trade for this particular event is nearly $6.5 million, which is middling compared to many other trending event markets on Kalshi.

Kalshi is a neutral intermediary in the market with no interest in the outcome of any event contracts. You aren’t betting against Kalshi. Instead, the company makes money by charging trade-fees on contracts. So that means if people place more bets and buy more contracts, then Kalshi can capture more value. The platform’s interest is in maximizing the number of event markets (things to bet on) and the volume of trade (people placing bets) on their platform. 

For market maximalists, platforms like Kalshi should be the main arbiters of truth in society. In Mansour’s vision, prediction markets are an “antidote” to the problems of “living in a world where we have an abundance of information” but no way to filter the noise and discern “what’s real from what’s not.” By aggregating different opinions about the future in one place, and using “skin in the game” as an incentive for accuracy, Mansour expects that a “new consumer habit” will emerge of people “going to these markets to find an unbiased sort of source of truth.” Prediction markets like Kalshi won’t be a source of “the ultimate truth,” Mansour says, but he does “ think they’re as close as it gets.”

Such grand statements are unsurprisingly absurd coming from a tech startup founder. The problem is that other people take them seriously. (Kalshi declined to comment.)

Right after ESPN announced plans to integrate DraftKings into all its platforms, CNN signed a deal with Kalshi to bring “real-time probability data into the network’s TV broadcasts and digital platforms starting next year.” If you thought gambling was ruining the integrity and community of sports, just wait until CNN gives you live odds on the veracity of what its anchor is reporting. 

The truth of markets

A century of economic theory tells us that efficient markets use price signals to reflect all relevant knowledge in society.

According to this model, the market is the most powerful information processor ever created. It aggregates the hidden facts and feelings that reside inside people’s minds and distills that knowledge into actionable insights like prices in a supermarket or betting odds on the future. In addition to the invisible hand, the market is also theorized to be a collective brain. The libertarian architects and defenders of prediction markets point to these economic models when justifying the existence of a betting parlor they claim is actually a consensus machine that produces accurate predictions and unbiased truth.

However, a century of capitalism reality tells us actual markets are structured by irrational behaviors, information asymmetries, and power hierarchies. It’s impossible to act like a rational agent if you are really just another imperfect person swayed by biases, heuristics, and groupthink. It’s impossible to engage in due diligence as a good consumer if other buyers and sellers are incentivized to lie, cheat, and conceal information if it benefits them. It’s impossible to maintain fair standing in the marketplace of ideas where people vote with their dollars and the more dollars you have, the louder your voice and more powerful your values. Rather than an efficient market guided by a collective brain toward the truth, we have an imperfect system of people trying to do the best they can while not getting screwed.

Prediction markets don’t magically escape all the social problems and perverse incentives that plague other real markets just because people are betting on the future instead of buying widgets in a store. A world of total financialization, where every opinion is a tradeable asset, where the market is the ultimate arbiter of what’s valuable and true, is also a world that creates endless incentives for arbitrage, manipulation, collusion, and exploitation in the pursuit of profit extraction. 

Financialization is a predatory logic. It is not just one more way of organizing the world among many others. The goal is to eliminate other competing worldviews and reengineer society into a casino where the hedge funds always win. The only human values that matter are the ones that can be turned into tradeable assets and sold to the highest bidder.