Tarek Mansour, CEO of the financial exchange and prediction market Kalshi, has seen significant growth in his company during the build up to the 2024 Presidential Election.
Since Kalshi gained approval from the Commodity Futures Trading Commission to trade event contracts in early October, the company has seen close to $200 million in trades on the U.S. Presidential Election, Mansour shared with "Squawk Box" on CNBC.
Mansour said the “demand curve is truly exponential” regarding his company’s popularity explosion. The app has risen to the No. 1 spot in the Apple App Store “Finance” category, displacing longtime incumbent Cash App. He also mentioned that Kalshi has reached the top 10 of the App Store-wide rankings, with the app hitting No. 7 at the time of writing.
"I think we're gunning for No. 1 on the App Store by Election Day," Mansour said.
The U.S. Election has been crucial in Kalshi reaching a “critical mass” of people using the platform. Mansour believes the influx of customers using the trading platform will continue driving its growth and success following the November elections.
The average amount traded on election markets on Kalshi is between $300 and $400. However, many wagers reach seven figures, which the online trading platform can support without prices changing, thanks to its liquidity.
Rival trading platform Robinhood launched its election contracts Monday.
What is Kalshi?
Kalshi is a regulated financial exchange dedicated to trading event contracts. It was the first operator to get approval in the U.S., and during his conversations with "Squawk Box," Mansour was keen to emphasize that the site only accepts trading from American players. The U.S. election is drawing attention from across the globe.
Effectively, event contracts allow customers to place money on whether a specific event will happen, paying based on the likelihood of that event occurring. For example, for the 2024 Presidential Election, there are markets for Donald Trump or Kamala Harris to win the election.
However, Kalshi also has a range of other trading markets on the election, including which presidential candidate will win in each state and where control of the House and Senate will go.
Insights into the 2024 Election
With so much spent on the 2024 Presidential Election at Kalshi, Mansour shared some insight that gives a snapshot of the public’s opinion. He explained that while the average bet size on Harris is slightly larger than that of Trump, more customers are backing the Republican candidate to win the election.
However, Mansour also clarified how people should read the U.S. election odds displayed at Kalshi, as “people are confusing the odds these markets are giving us with polling.”
For example, he suggested that if Trump were 20 points up in the polling, he would have a 100% chance of winning the election. However, if he has odds of 70% of winning the election on Kalshi, he actually has a 70% chance of winning.
While Kalshi has caught the public’s attention in the build-up to the 2024 Presidential Election, Mansour believes news outlets and other media companies will continue to consider its results for upcoming events, as the “market-based mechanism” provides insight into what the general population is thinking.
