Kalshi’s founders Luana Lopes Lara and Tarek Mansour, fresh off their company’s Election Night triumph, were photographed alongside President-Elect Donald Trump at UFC 309 in Madison Square Garden. Trump’s regulatory agenda is expected to be much friendlier to prediction markets and election betting, and Kalshi’s founders appear to be ensuring Trump is friendly to their company in particular.
My 4th time with the president this year, and every time I get even more bullish about the future he’s building for America. 🇺🇸🙏🏻🚀 https://t.co/eUsMIj8liw
— Luana Lopes Lara (@luanalopeslara) November 17, 2024
On Election Night, Kalshi’s odds showed Trump with a 90% chance of winning by 10 pm on Election Night. AP News didn’t call the presidential race until 5:35 am ET the next morning.
Prediction markets attracted a lot of attention in the weeks leading up to the presidential election. In early October, Elon Musk said Polymarket, another popular prediction market, was “more accurate than polls.” Donald Trump’s team at Mar-a-Lago reportedly kept Kalshi’s odds on hand throughout Election Night.
Pretty cool to see last night in Mar A Lago everyone was using @Kalshi to gauge the election. Even the President himself. https://t.co/OMaX2xisgd
— Gunther Eagleman™ (@GuntherEagleman) November 6, 2024
Kalshi’s team has good reason to pull closer to the incoming administration. Trump will select the next CFTC chair, which could create a friendly regulatory environment for Kalshi and other prediction platforms like PredictIt. Musk is also expected to be a major influence on Trump, so his enthusiasm for prediction markets could be beneficial to Kalshi.
Looking past the lawsuits
Kalshi and PredictIt are engaged in lawsuits with their regulator, the Commodity Futures Trading Commission (CFTC). Trump is expected to name a CFTC chair more amenable to election markets than the current chair.
Prediction markets aren’t the only expected beneficiaries of Trump’s re-election. The crypto industry poured millions of dollars into Trump’s campaign and into congressional races to elect crypto-friendly candidates.
Trump’s promises to create a cryptocurrency reserve and to appoint an SEC chair who will regulate cryptocurrency favorably are two signs that his administration will at least be friendly to the industry.
Polymarket runs on the Polygon blockchain network and Kalshi accepts deposits in USDC, a crypto stablecoin. They have a stake in Trump’s approach to the crypto industry, but that’s not all they’re getting from a Trump Administration.
Prediction markets and crypto both thrive as alternatives to traditional institutions. Cryptocurrencies pitch themselves as unregulated currencies untouched by central banks. Kalshi has touted itself as a replacement for pundits and some polls.
Part of Trump’s appeal is his anti-establishment worldview. Any company that thrives in an environment where traditional institutions are distrusted can expect a favorable environment in a Trump presidency.
Kalshi has powerful allies in Musk and Trump, and the company seems committed to keeping those allies close as they come to power.
