The prediction market space has quickly become a two-horse race between Polymarket and Kalshi, and the latter's CEO, Tarek Mansour, sees one obvious comparison to a couple NFL greats.
Key Takeaways
- Kalshi CEO Tarek Mansour says Kalshi’s rivalry with Polymarket mirrors Brady versus Manning and has helped both companies reach higher levels.
- Kalshi has been at the center of a rapid growth in prediction markets, including several prominent partnerships.
- The continued growth comes amid lawsuits from multiple states, with the uncertain legal status of prediction markets potentially throwing a wrench into Kalshi’s plans.
"When Tom Brady kind of reflected on that back in the day, he's like, 'You know, we were like the most ferocious on the field, and we fought each other,'" Mansour told the "20VC" podcast Monday. "But then over time, he became grateful for that because he realized that without (Peyton) Manning being in there and vice versa, he would have never achieved what he achieved. I think that's happening in prediction markets."
Kalshi, whose recent growth has exploded to the tune of a better than $10-billion valuation in October, has continued to establish itself as a market leader among prediction markets, with recent partnerships including a landmark deal with CNN as well as deals with PrizePicks and the NHL.
"What I'm learning over time is that an industry truly becomes an industry when there's a rivalry, because that rivalry will push you beyond the limits of what you thought you could get to," Mansour added.
On the other side of the rivalry stands Polymarket, a blockchain-enabled prediction market that recently relaunched in the United States with a waitlist, offering sports contracts and planning to expand its offerings.
"Without Polymarket, we wouldn't have pushed our marketing and pushed our product as hard," said Mansour. "That sort of infighting is going to push both of us to scale this industry and reach heights that we honestly wouldn't have been able to otherwise, which long term is actually net positive for the customer."
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Growth comes amid legal troubles
While Kalshi continues its rapid growth, legal issues have persisted due to the gray area in which prediction markets operate.
Recent lawsuits and countersuits involving multiple states, including Connecticut and Massachusetts, continue, as states push back on prediction markets for what they deem a breach of multiple laws.
On Wednesday, a federal court temporarily blocked Connecticut from enforcing its cease-and-desist order against Kalshi, as questions continue to swirl around whether states can regulate or eliminate these markets.
Kalshi continues to argue that state gambling rules do not apply to its operations, as it is federally governed under the Commodity Futures Trading Commission. A Nevada regulator recently ruled against that framework, further throwing its legal standing into flux.
“Kalshi relies on a strained reading of the already convoluted Commodities Exchange Act (CEA) in an attempt to evade state regulation,” Nevada federal Judge Andrew Gordon wrote in a late November decision. “Kalshi’s interpretation would require all sports betting across the country to come within the jurisdiction of the CFTC rather than the states and Indian tribes. That interpretation upsets decades of federalism regarding gaming regulation, is contrary to Congress’s intent behind the CEA, and cannot be sustained.”
