Part IThe Story
An Hour Without the Phone
For one hour in September 2024, Luana Lopes Lara did not look at her phone.
This would be unremarkable in almost any other office on almost any other afternoon. But the office was Kalshi's, on Broadway in SoHo. The afternoon was the one on which a federal court in Washington was expected to rule on KalshiEx v. CFTC, the lawsuit a 25-person startup with roughly $20 million in monthly trading volume had filed against the agency that held its license. Losing meant the Commodity Futures Trading Commission would hold a permanent veto over anything Kalshi ever wanted to list. Losing meant, by the reckoning of the company's own investors, that the company would die. Ali Partovi, one of Kalshi's earliest backers, the man whose fund Neo also wrote early checks into Cursor and Ramp, had come by for a meeting he later acknowledged was terribly timed. Across the table his host talked through whatever they had come to discuss. She was, Partovi said afterward, "cool as a cucumber."
Down the hall, her co-founder Tarek Mansour took a call from their litigator, and his hands began to shake.
They had won. The room went up. Chairs flew, according to one account assembled from employees who were there, and for a few minutes a company that had spent six years in the anteroom of American finance let itself make noise. Then, roughly twenty minutes later, everyone was back at work.
The stillness is the detail worth staying with. It is easy to read composure as temperament, as a gift of the nervous system. It is harder to read it as a skill acquired by a specific method in a specific place, and Lopes Lara's method was acquired in a ballet studio in Joinville, a German-settled industrial city in southern Brazil, where an instructor would hold a lit cigarette beneath a girl's raised thigh to see how long she could keep her leg up by her ear without lowering it into the flame. A position is a thing you hold. Hold it long enough and the pain becomes information, then noise, then nothing at all. A trader would say the same about a position on a book.
What Lopes Lara built is an exchange on which almost anything can become a position: the next Fed decision, the Best Picture winner, the control of Congress, the length of a winter, the winner of a football match on a Sunday in Kansas City. It made her, at 29, the youngest self-made woman billionaire in the world according to Forbes, displacing Scale AI's Lucy Guo, who had in turn displaced Taylor Swift. It also made her company a defendant, a plaintiff, a regulatory precedent, a cable-news data partner, a target of attorneys general from Massachusetts to Washington State, and a thing her native Brazil would block outright. The woman who sat still for an hour has spent the years since watching her idea outrun every frame she built around it.
By the Numbers
The Kalshi Wager
$22BKalshi valuation after a TCV-led round, May 2026
~12%Lopes Lara's estimated stake in the company
65Lawyers on the spreadsheet the founders cold-called; all said no
Nov. 2020CFTC designation as a contract market, after roughly two and a half years
$263.5MKalshi fee revenue in 2025
89%Share of 2025 revenue that came from sports
55International jurisdictions restricting access as of June 2026
Four Puffs of Strawberry
The school days in Brazil began at seven in the morning, because Brazilian school hours run early, and ended around one in the afternoon. Ballet began at one-thirty and ran until nine or ten at night. Then she studied. "That was a very intense part of my life," she told Barry Ritholtz in April 2022, in the even, slightly hurried English of someone translating as she goes, and then she supplied the detail that does the work of a paragraph: the dancers measured their food "down to like a four puffs of strawberry before this rehearsal."
Four puffs of strawberry. Not a strawberry. Puffs, as though fruit were a dosage.
The school was the Escola do Teatro Bolshoi no Brasil, in Joinville, the only branch of the Moscow institution outside Russia. She attended for eight years. Later accounts, most traced to a December 2025 Forbes profile, added color the sober Ritholtz conversation lacked: the cigarettes under the thigh; rivals who reportedly hid shards of glass in each other's pointe shoes. Vanessa Siqueira, who spent five years at the school from ages nine to fourteen and was crowned Miss Universo Joinville in 2025, remembered days that began at five and ended near eleven, report cards that had to stay immaculate as a condition of continued enrollment, and a classmate who "always had the best grades, was extremely dedicated and did everything with impeccable posture." Siqueira did not sound surprised by the billion dollars. "She always had something special," she told G1. People say this about the famous. Sometimes it is true.
What Lopes Lara loved about ballet was not its beauty, or not only. "It was extremely hard to get to the top. It's extremely competitive. And there's nowhere to hide, you need to be completely on, you need to give it your all." The phrase nowhere to hide is a dancer's phrase, but it is also, in a way she may not have intended in 2022, an exchange designer's phrase: a market with fully collateralized positions and published rules is a stage with no wings.
The other half of the house was engineering. She was born in Belo Horizonte on May 20, 1996, and the family moved through Timóteo in Minas Gerais and Niterói across the bay from Rio before arriving in Joinville, where she enrolled at the Escola Técnica Tupy, a school built around the exact sciences. Her father is an electrical engineer who once worked at IBM. Her mother taught mathematics. Her older sister trained as a chemical engineer and went to the United States for a PhD. "She's my older sister, so I always saw her as an inspiration," Lopes Lara told Forbes Brasil in 2021. "It's in the genes," she said on another occasion, which is the kind of thing children of engineers say when they have been asked to explain an aptitude they were never allowed to treat as optional. Outside ballet, she did Olympiads, took gold in the Brazilian Astronomy Olympiad and bronze in the Santa Catarina Mathematics Olympiad, and was expected, she said, to "get 100 on everything on the math and science side."
Next to her bed, as a young girl, she kept a list of people she hoped to emulate. It included Winston Churchill, Alexander the Great, and Blair Waldorf of Gossip Girl. The juxtaposition is funny and it is also exact: two empire-builders and a teenage social strategist who treats an Upper East Side private school as a theater of war. "Since I was very little," she told Maya Sulkin of The Free Press, "I was weirdly obsessive and ambitious."
She graduated from the Bolshoi school in 2013 and spent about nine months dancing professionally at the Salzburger Landestheater in Austria, where she was cast in a season of Swan Lake. Then she stopped. The accounts of the decision are thin, and she has not, in the record available, dramatized it. The hero she reportedly had in mind was Steve Jobs. She applied late to American universities, later than the usual cycle, and was admitted to Harvard, Yale, Stanford, and MIT. She chose MIT because, she said, it was the place that would most take her out of her comfort zone, and she went on a scholarship from the Fundação Estudar, the foundation backed by Jorge Paulo Lemann and other Brazilian businessmen. When she told her parents the plan, "they basically said, 'Well, let her try, who knows, maybe it works out.'"
Years later, in a Fortune interview conducted in the open-plan office where she was, the reporter noted, hard to pick out from anyone else at a desk, she supplied the sentence that explains the whole arc better than any profile writer could:
— Luana Lopes Lara, to Fortune, April 2026With ballet, everything's about delayed gratification. I'm going to work hard a full year so that I have 30 seconds on stage. I'm going to be in pain so I can get those 30 seconds.
A year of pain for thirty seconds is a ratio. She would spend the next decade pricing it.
The Price of a Belief
At MIT she sat in the front row. This is how Tarek Mansour remembers her first, and it is how their friendship began: he started sitting next to her, by most accounts, to learn from her.
Mansour grew up in Lebanon. He lived through the conflict there in 2007 and taught himself English before arriving in Cambridge, and before college he had been, of all things, a professional skier, which made him the only other person in their circle whose adolescence had been organized around a body performing under conditions where a mistake hurt. "We have very similar backgrounds," Lopes Lara said, and she meant the intensity rather than the geography. He is, by his own description, a paranoid risk manager. He also has an obsession with Barbarians at the Gate, Bryan Burrough and John Helyar's account of the RJR Nabisco leveraged buyout, which he urged on Lopes Lara for years before she finally began it in the spring of 2022. Two international students, a Brazilian and a Lebanese, part of the same group of foreign friends, both in computer science, both quietly intent on becoming traders.
That was the plan. "Most of our MIT time, we were both very focused on just getting finance jobs and never even thought about starting a company," she said. She studied computer science and mathematics, then took a Master of Engineering, working in the Computational Cognitive Science Laboratory under Max Kleiman-Weiner and Josh Tenenbaum and as a researcher at CSAIL. Her advisor was Patrick Winston, the artificial-intelligence professor, who she said "set my mindset to where I wanted to be." Her interest in finance began in the statistics classes of Peter Kempthorne, who would later sit on Kalshi's board. The books she read around then are the books of a person interested in how people misjudge the future: Philip Tetlock's Superforecasting, Dan Ariely's Predictably Irrational, the work of the economist Robin Hanson. "We were really captured by the idea that casual forecasters are often more correct than subject matter experts," she told the interviewer Max Raskin. "That's the entire idea Kalshi is founded on."
The summers were spent inside the machinery. She worked at Ray Dalio's Bridgewater Associates, on the software engineering side; at Ken Griffin's Citadel Securities, as a quantitative trader; and at Five Rings Capital, a small proprietary trading shop in New York. Mansour worked at Goldman Sachs on the equity derivatives desk, at Citadel, and at Five Rings. In each place they saw what Lopes Lara would come to call "the Kalshi behavior": firms making enormous trading decisions on the basis of a view about a discrete event. When Brexit loomed in 2016, she told Julia Boorstin of CNBC, traders tried to assemble exposure by shorting the pound and buying European stocks; when Donald Trump ran that year, they shorted the S&P. Every bet on an event was a bet on something adjacent to the event, the thing once removed. You could be right about the world and wrong about the trade.
The idea crystallized at Five Rings, where she and Mansour were interns together, and it crystallized inside a game. Traders at the firm played what she called the market-making game, sometimes all day: someone would post a bid and an offer on the probability of some outcome, and the next person could only tighten the spread or trade against it. On one of those days, she took a massive position on Trump doing something. She has said repeatedly that she does not remember what. "Everyone thought I was crazy and debated me a lot on that. But I ended up being right."
Then the walk. She and Mansour were heading back through the Financial District to the apartments where the interns were housed, and the thought would not leave her head: "Why isn't there a place for people to do this? Like, we love doing this? We do this the whole day." They stayed up the whole night talking. "If there was going to be someone to figure it out, it was going to be us." They sat on it for another six months, until, as she put it, "this is a calling, we have to do it."
There is a version of this origin story that every founder tells: the walk, the night, the napkin. What distinguishes this one is the forgotten Trump position at the center of it. The founding act of Kalshi was a bet on a political event, held against the consensus of a room full of professional traders, and the founder cannot recall the event. What she remembers is having been right, and having been debated, and the feeling of the gap between the two. The content of the belief was disposable. The structure was everything.
Sixty-Five Lawyers
The company was founded in San Francisco in 2018, under a name, Kownig, that thankfully did not survive. The founders knew from the start what most of their peers in fintech would spend the next five years learning the hard way: event contracts in the United States lived under the jurisdiction of the CFTC, the agency that regulates the futures and derivatives markets, and the CFTC had been saying no to proposals like theirs for decades.
They did not know anything about regulation. "Me and my co-founder were both computer scientists, we knew nothing about regulation," she said. So they did what two MIT engineers do with an unfamiliar problem. They built a spreadsheet. It held the names and email addresses of 65 lawyers who might plausibly know something about the matter. They split the list and called, one by one. Ritholtz, retelling it, put the number at sixty or seventy in a single day. Every one of them said some version of the same thing: people have been trying to do this since the 1980s, the CFTC has already said no, forget it. Other accounts note that the firms declined in part because the founders were young and the company was nothing.
The break came, as breaks do, through a friend of a friend of a friend. Jeff Bandman was a former CFTC official who understood the commission from the inside, its core principles, its anxieties, the shape of the objections it would raise before it raised them. He took them on. He was still working with Kalshi in 2022. In the founding myth of most startups, the lucky introduction is a venture capitalist. In Kalshi's it is a retired regulator.
What followed was something closer to a long exam than a negotiation. They would bring the commission a proposal; the commission would raise concerns about manipulation, surveillance, settlement, the definition of terms; the founders would go back and run analyses on comparable markets, build the surveillance systems, write the rules, and return. "Okay, that's fine," the staff would say, in her retelling, and then produce the next set of issues. "We used to say it's like we were climbing a very high mountain, and then as we started climbing more, we would see it's actually twice as high," she said. "It was like walking in the desert a little bit. We didn't know where the end was."
She is notably generous about the regulators in this period. "They were fantastic from the beginning to really listening and working with us," she said in 2022. The obstacle, as she framed it, was not ideology but comprehension: the commission had never been shown in sufficient detail how such a market would work, how it would resist manipulation, how its rules would operate. "It was more like explaining what we wanted to do." The generosity would not survive the next round.
In 2019 they went to a Y Combinator hackathon with two MacBooks. The other teams, she recalled, had banks of servers and serious hardware. They presented a demo to Michael Seibel, then YC's chief executive, a co-founder of Justin.tv and Twitch, a man who had built his reputation on telling founders the truth about their companies. Five seconds in, he cut them off. "This is illegal," he said, in her memory. "What are you doing?" Mansour, sure they would not make the top ten, opened a beer. They made the top ten. They presented again and finished in the top three, among the winners. That night, walking back to the friend's apartment where they were sleeping in San Francisco, they let themselves think the unthinkable: maybe we aren't crazy. Soon after, they were admitted to the YC batch.
Seibel became the most important mentor of their early years, and the advice that stuck was not technical. Experts had told the founders their odds were zero. "These are just normal people like you are," Seibel told them, as she recounted it later. "There's no reason you should just listen to what they're saying. Do what you believe is right." It is the sort of encouragement that sounds like a poster until one remembers the context: the speaker was the man who, months earlier, had called their idea illegal in the first five seconds.
Their YC experience, she said, "was actually very different from most of the other startups. Like, we were measuring regulatory traction, and other startups are measuring user growth, or revenue." There was no product to ship. One account built from early employees describes nearly two years with no product and no revenue, and a team of people with Citadel résumés who stayed anyway through public failures and layoffs. In November 2020, roughly two and a half years after the walk through the Financial District, the CFTC designated Kalshi a contract market, the first regulated exchange to list contracts directly on the outcomes of events. The site opened to the public in July 2021.
Asked once about the approach, the opposite of Silicon Valley's catechism of moving fast and breaking things, she gave an answer that reads now as a prophecy with a sting in its tail: "There's been like a lot of historical examples of unregulated platforms getting meaningful volume and then being shut down by regulators." Regulation, in her account, was not a cost of doing business. It was the business. "The opportunity really shrinks if you don't take regulation into account."
The Exchange That Would Outlast CME
Listen to the 2022 interviews now and the vocabulary is almost touchingly institutional. The goal, she said again and again, was to become "the New York Stock Exchange for events." She wanted to build something that would outlast the CME Group, which had been "around there for like 150 years." The plan was a ladder of liquidity: begin with retail, mostly "informed retail options traders," then bring in brokerages like Interactive Brokers and E*Trade, then proprietary trading firms, then hedge funds, then natural hedgers, insurers offloading risk, and eventually "maybe a Burger King hedging, I don't know, price of plastic straws or something like that."
The parables were agricultural. Consider an ice cream truck in New York City, she offered on Ritholtz's show: several days of rain and sales collapse, so the truck owner buys "yes" on rain as insurance. On the other side sits a speculator who reads a forecast of 20 percent and takes "no." If it rains, the hedger is protected; if it doesn't, the speculator collects. "Kalshi is one of the most pure forms of exactly this hedging and speculation match." Ritholtz offered a home buyer worried about the 30-year mortgage rate crossing 3.9 percent by April 15. She mentioned students during the Omicron wave hedging against not being able to return to campus.
The architecture was conservative by design. Every contract was priced between one and ninety-nine cents and paid a dollar if correct, so prices doubled as probabilities. Positions were fully cash-collateralized: no margin, no leverage. "We really want to start in a way that is very safe for everyone," she said. Contracts were "legal binding documents," up to forty pages specifying sources, thresholds, and edge cases, "to really make sure that there's no room for indeterminacy." Fees averaged less than 1 percent. Ritholtz, a wealth manager by trade, tried to talk her into earning money on the float of customer cash, the way Schwab had after moving to free trading; she politely declined. "We don't make money on float."
On gamification she drew a distinction that would come back to haunt the company. The problem, she argued, was "less about the asset class and more about the actual platform and the mechanics." Equities on Robinhood draw gamification complaints that equities on Schwab do not. "We're very, very focused on building a platform that's safe, easy to understand and to use, but not gamified."
And then Ritholtz asked about Russia and Ukraine.
— Luana Lopes Lara, Masters in Business, April 2022We avoid any contract that's related to war, terrorism, assassination or violence of any kind. We don't want to have those markets on our platform.
The Oscars market was the novelty of that season, "the very first regulated derivatives, I guess, in the entertainment industry," with more than 150,000 contracts traded in a couple of weeks. Activity, she noticed, did not concentrate by category the way they had assumed it would. "It really is about what's in the news. So what's top of the New York Times?" When Justice Stephen Breyer announced his retirement, the markets team had to spin up a Supreme Court nomination contract fast. Her own attention stayed on the macro: inflation, the Fed. "I always have the Fed markets next to me just to check," she told Raskin, explaining that she checked them against the claims of people on Twitter.
The cap table was assembled with the same eye for legitimacy as the rulebook. Sequoia led a $36 million Series A; the partner was Alfred Lin, who had backed Airbnb and DoorDash and whose doctoral work was in statistics. Then the founders went looking for Wall Street. Ali Partovi offered introductions to Henry Kravis, which made Mansour, the Barbarians at the Gate devotee, "absolutely fascinated," and to Charles Schwab himself. Schwab told them that Kalshi's early days looked very much like his own early days building his brokerage. One can see why a man who had once spent years fighting to give ordinary investors access to markets previously reserved for professionals would recognize the shape.
In December 2021, both founders were named to the Forbes 30 Under 30 list in finance. Forbes Brasil ran a story noting that she was the only Brazilian on the American list, and she briefly went viral at home. The two of them rang the Nasdaq opening bell. In 2022 she was 25, discussing the notional value of interest-rate swaps ("around, I think, $500 trillion") with the easy confidence of someone who believed that event contracts belonged in that company, and that the path there ran through the regulator's front door.
Are You Fucking Kidding Me?
The front door closed.
Beginning in 2022, Kalshi's attempts to list contracts on which party would control Congress ran into sustained resistance at the CFTC. The agency delayed. It questioned whether the contracts were genuine hedging tools, whether they served the public interest. One commissioner, Caroline Pham, dissented, arguing the contracts were not prohibited and need not pass a public-interest test at all. In August 2023, six Democratic senators — Jeff Merkley, Sheldon Whitehouse, Ed Markey, Elizabeth Warren, Chris Van Hollen, and Dianne Feinstein — wrote to the commission urging rejection on grounds of electoral integrity. Kalshi revised its proposal; one version, reported by Bloomberg, would have allowed hedge funds and institutions to put as much as $100 million on an election. The chairman, Rostin Behnam, warned that allowing such contracts could "ultimately commoditize and degrade the integrity" of the electoral process. In September 2023, the CFTC rejected the congressional-control contracts.
Here the founders' account of the regulator as a patient interlocutor gives way to something harder. The company that had spent two and a half years asking permission decided to sue.
It was not a consensus decision. Alfred Lin, Sequoia's partner and a board member, told the founders that even if they won someday, they would die getting there. Mansour, the self-described paranoid risk manager, tried to call the whole thing off the night before the filing. His co-founder's reply, as reported by people close to the company: "Are you fucking kidding me?" She talked the team back into the plan.
— Tarek Mansour, Kalshi CEOIf it were up to me and Alfred, we probably wouldn't have sued, to be honest. She's the one who wanted to sue.
The decision complicates the division of labor the company presents publicly. Mansour is the external face: regulators, investors, interviews. Lopes Lara runs the inside: product, design, engineering, operations. But at the one moment when the company's relationship with its regulator was decided, it was the inside person who set the outside strategy, and the external person who wanted to hold back. CNBC, in naming her a 2026 Changemaker, credited her with "making the call to sue the government." The quiet one in the front row turned out to be the aggressive one.
The logic, reconstructed, is an options trader's logic. Not suing meant a permanent ceiling: an agency with an effective veto over the product the founders believed mattered most. Suing meant risking the license and the company. But a company permanently barred from its most important product was already, in some sense, dying slowly. The asymmetry favored the swing. "I think generally the bets that seem ridiculous at first and there's a lot of debate, then there's no way that it's going to work, are usually the ones that are achieved, like the large outlier results," she had told Ritholtz in 2022, two years before she placed the largest one of her life.
The district court in Washington ruled in 2024 that the CFTC had overstepped. The agency sought a stay; on October 2, 2024, an appeals court refused it, and Kalshi relisted its congressional markets. Stephen Hall of the advocacy group Better Markets called it "a sad and ominous day for election integrity." It was the first time in roughly a century that Americans could legally trade on the outcome of their own elections.
Then came the night that turned the precedent into a business. In the two weeks before the 2024 presidential election, Kalshi handled about $1.4 billion in volume, peaking at some $42 million in a single day. On election night, its market pointed to Trump while the polls still showed a tie. A million new customers arrived within a fortnight. The company that had sat still for an hour waiting for a court ruling was suddenly a hundred times larger than it had been, on a staff of about twenty-five.
The Calendar of Sport
The ice cream truck never arrived. The football fans did.
By 2025, sports accounted for more than 90 percent of activity on Kalshi and 89 percent of its $263.5 million in fee revenue. Analysts described the platform's volume as "heavily tied to the sports calendar." On Super Bowl Sunday in February 2026, according to Fortune, Kalshi took in $871 million. During the 2026 World Cup, by the company's own count, it gained 3 million new users, and traders put more than $1.2 billion into the question of who would win the tournament. Between $3 billion and $5 billion was wagered on NFL games; Barron's concluded that Kalshi needed the league. The company became the infrastructure behind Robinhood's prediction-markets hub in 2025, the brokerage whose gamification Lopes Lara had once cited as the counterexample to her own design. CNN and CNBC signed partnerships in late 2025, Fox in 2026. The Associated Press agreed in March 2026 to supply vote counts and race calls.
None of this is concealed. The company's statements are frank about where the money comes from, and Lopes Lara's framing has shifted with it. "We have no house," is how she explains the difference from a sportsbook now: Kalshi matches buyers and sellers rather than taking the other side, so it has no stake in the outcome. The line is accurate as far as the exchange's own book goes. A November 2025 proposed class action in New York alleged that users were unknowingly betting against Kalshi or its partners; she called the suit "baseless." In 2022 she had mentioned, almost in passing, that Kalshi had "an affiliate trader that's there to provide liquidity," while insisting the exchange itself never took positions.
The money arrived on a steep curve. Kalshi was valued at $2 billion in June 2025. In December, a $1 billion round led by Paradigm, the crypto investment firm, with Sequoia, Andreessen Horowitz, and Y Combinator participating, valued it at $11 billion. In May 2026 a round led by TCV doubled that to $22 billion. Each co-founder owned roughly 12 percent.
The harder ledger runs alongside. In 2025 the company launched a "student ambassadors" program to bring "the next 100M users to prediction markets," then pulled the post and page after a backlash; critics noted that treating these contracts as commodities rather than wagers effectively lowered the minimum age from 21 to 18. In January 2025 it hired Donald Trump Jr. as a strategic adviser, with compensation including more than $300,000 in Kalshi shares. In January 2026, some users holding winning NFL positions were initially paid back only their stakes until a backlash, amplified by the gambling-industry analyst Dustin Gouker, prompted full payouts. According to the site's own disclosure, reported by The Wall Street Journal, there are 2.9 unprofitable users for every profitable one. An ad aired during the 2025 NBA Finals, generated with Google's Veo 3 and OpenAI's ChatGPT by a self-described "AI filmmaker," was called "chaotic" by Business Insider.
And then there are the markets that sit closest to the line she drew in 2022. A contract asked whether the Integrated Food Security Phase Classification would declare famine in Gaza; it settled yes after the IPC did so on August 22, 2025, and drew a wave of criticism. After Iran's supreme leader Ali Khamenei was killed in Israeli airstrikes, Kalshi froze $54 million in trades on a contract asking whether he would be "out as Supreme Leader" by certain dates, citing a policy against transactions "directly tied to death." The Washington Post reported that the company had heavily promoted the market. Kalshi conceded the wording was "grammatically ambiguous," standardized its rules so that such markets would settle at prices from before the person's death, and paid roughly $2.2 million in reimbursements.
Set the 2022 sentence beside the 2026 headlines and the distance is plain. We avoid any contract that's related to war, terrorism, assassination or violence of any kind. Kalshi did not list a contract on Khamenei's death; it listed one on his tenure, and a death resolved it. It did not list a contract on starvation; it listed one on a classification by a technical body. This is the logic of the forty-page rulebook, and it is also the logic of the adjacent market, the thing once removed, that she and Mansour founded the company to eliminate. The founding complaint was that you could only bet on war by trading oil. The mature exchange discovered that you could only avoid betting on war by drafting very carefully.
Mansour has put the ambition without euphemism: "The long-term vision is to financialize everything and create a tradeable asset out of any difference in opinion." It is a magnificent sentence and an unnerving one. It contains the market-making game at Five Rings, the forgotten Trump position, the ice cream truck, the Super Bowl, and the famine classification, all at once.
Source of Truth
There is a click-through screen that new Kalshi users must pass before trading certain markets. On it, Lopes Lara told The Wall Street Journal's Amol Sharma in 2026, is a phrase she found funny enough to mention: "Don't be lazy. Read the rules."
She was explaining a market on who would officially lead Venezuela on June 1. Nicolás Maduro had been captured and was being held in a federal detention center, by the interviewer's account, in Brooklyn. Kalshi clarified that the market would nonetheless currently resolve to Maduro, because the government's official organizational charts still listed him as president. The price leapt from about 20 percent to 85 percent in a day. She did not know the specifics of that ruling, she said, but she knew the principle. "A lot of the times we have to basically pick a source of truth and that source of truth cannot change." Otherwise, "it becomes so, you know, like subjective, and the traders need to have certainty."
This is the quant's creed, and it has a severity that the ballet studio would recognize. Reality is permitted to be ambiguous; the contract is not. A man sits in a cell in Brooklyn and is, for the purposes of a market, the president of Venezuela, because a website says so and the website was chosen in advance. The forty-page contracts she described in 2022 were the beginning of a jurisprudence, and the exchange's legitimacy now rests on applying it even when, perhaps especially when, the result looks absurd.
The other half of the rulebook is enforcement, and Kalshi has made a public spectacle of it. In February 2026 it fined and suspended a video editor for the YouTuber MrBeast for suspected insider trading on markets about his employer. In April it fined and suspended three congressional candidates for betting on their own races. In July, a White House teleprompter operator, Gabriel Perez, was alleged to have bet nearly $100,000 on which words the president would say during the State of the Union. And then George Santos: the former congressman, at the time a paid spokesman for Kalshi, publicized that he would attend the State of the Union, bet against his own attendance on the rival platform Polymarket, and did not go. The CFTC fined him $35,000, twice his profit. Kalshi, which had already dropped him, fined him $70,000 and banned him for life, the first lifetime ban in its history.
The comedy is irresistible and also, in a sense, the point. Kalshi has positioned itself as more devoted to compliance than Polymarket, and policing its own users loudly is how a platform demonstrates that its prices mean something. When a Kalshi trader noticed a suspicious spike in streams of Malcolm Todd's "Earrings" in July 2026, Spotify investigated and removed more than 500,000 artificial plays. The market, in that case, functioned as an auditor of the world it was betting on.
The world, increasingly, auditing in return. In May 2026 the U.S. Senate barred senators and their staff from trading on prediction markets. The political scientist John Sides has questioned whether election prediction markets aggregate information as efficiently as their champions claim. The counter-evidence is also real: a February 2026 Federal Reserve working paper by Anthony Diercks, Jared Dean Katz, and Jonathan Wright found Kalshi "a useful method for measuring macroeconomic expectations," and Liz Hoffman of Semafor found the platform's economic markets — inflation, unemployment, commodities — highly precise over five years. The inflation and Fed markets, the ones Lopes Lara kept beside her screen while reading Twitter, are the ones that work best. They are also a sliver of the volume.
Fifty-Five Jurisdictions
The court victory in Washington solved one regulator. It did not solve fifty states.
In September 2025, Massachusetts Attorney General Andrea Campbell sued, accusing Kalshi of "promoting and accepting sports wagers" outside state gambling law; in January 2026 a state judge ordered the company to geofence Massachusetts residents out of its sports markets. Michigan sued in March. Arizona filed twenty misdemeanor criminal charges the same month — a federal judge, Michael Liburdi, dismissed them in May, ruling that federal law preempted the state's. In Ohio, federal judge Sarah Morrison ruled that Kalshi's products were gambling under state jurisdiction, explaining she wished to "avoid absurdity." Nevada imposed a restraining order, sought a contempt citation, and by July 24, 2026 had reached an agreement halting Kalshi's operations there. Washington State won a preliminary injunction. Wisconsin's attorney general said that "No company is above this law no matter how creatively those companies try to disguise the activity they're engaged in." Minnesota became the first state to ban prediction markets outright; a federal judge blocked the law in July. Three California tribes, then the Ho-Chunk Nation of Wisconsin, sued over gaming on tribal land. In July 2026, New York Attorney General Letitia James sued, seeking penalties and restitution the company reckoned at roughly $36 billion.
The federal government took Kalshi's side. The CFTC, now chaired by Michael Selig, sued New York, Wisconsin, Arizona, Connecticut, Illinois, Massachusetts, and Minnesota to defend its exclusive jurisdiction. "If you interfere with the operation of federal law in regulating financial markets, we will sue you," Selig said. President Trump posted that it was "critically important" that the CFTC retain "exclusive authority," and called Chris Christie, Letitia James, Tim Walz, and JB Pritzker "SCUM." The agency that had once rejected Kalshi's election contracts was now suing states on its behalf. The founders had spent years learning to read one regulator. Success relocated the fight into fifty legislatures and courthouses at once.
Abroad, the list of jurisdictions restricting access reached 55 by June 2026: the United Kingdom, France, Spain, Italy, India, Singapore, Australia, Canada. And Brazil.
Brazil blocked Kalshi in a sweeping ban on prediction platforms that cited investor protection. The country whose Forbes edition made her briefly famous in 2021, the country whose billionaire list she joined in August 2026 with an estimated fortune of R$13.4 billion, the country where Miss Universo Joinville remembers her impeccable posture and the city of Niterói's local paper celebrates her as a former resident: in that country, the product she built is unavailable. O Globo runs the story of the girl from Belo Horizonte under a headline about ballet and finance. Its readers cannot open the app.
This is perhaps the most quietly consequential fact in her story. Kalshi is, in the most literal sense, an American institution: a creature of the Commodity Exchange Act, the CFTC, the D.C. Circuit, the American appetite for football and federal preemption. Her favorite book, she told Ritholtz, was Americana, Bhu Srinivasan's 400-year history of American capitalism, which she is careful to distinguish from the novel of the same name. "Especially not being American, I think it made me understand the country and how it works so well." She listens to a podcast series on American presidents and watches The West Wing, House of Cards, and Succession. The United States Hispanic Chamber of Commerce booked her for its national conference in Fort Worth as one of the most exciting young Latina leaders in technology. She studied the country the way she studied the CFTC: as a system with core principles, to be mastered by an outsider who reads more carefully than the natives. Then she built something that could exist only there.
Thirty Seconds
When Forbes announced in December 2025 that she was the world's youngest self-made woman billionaire, she assumed it was fake. "People come up with so much shit now that I assumed it was false," she told Maya Sulkin over sauvignon blanc at a West Village wine bar, at 5:30 in the afternoon, an hour that would mark the end of most people's day and was, for her, an intermission; she planned to return to the office and work until ten. "I'm a big Taylor fan, so any headline with my name and Taylor's is like the craziest thing I've seen in my life." Lucy Guo, the woman she displaced, sent her a direct message. They had not, as of the spring, met.
Her net worth was estimated at $1.3 billion at the December valuation, roughly double that after May. Nothing, she insists, has changed. "It was pretty surreal. But it doesn't change anything at all. It's just company stock." After an IPO, she guesses, she will be liquid. "Right now it doesn't change anything in my life. I'm still here 12 hours a day, working very hard trying to build this into a way bigger company." The company's own biography lists her pastimes, in what it calls her rare spare time: painting, matcha, pilates, a dog named Lola, Taylor Swift, history documentaries. She calls herself "a very intense person," all-or-nothing about the company and about working out.
Alex Immerman of Andreessen Horowitz said there are few better preparations for being told no and pushing through anyway than professional ballet, and that she had carried a "calm confidence" into building Kalshi. Investors say such things to Forbes. Her co-founder said something less flattering and more useful: for years he argued with her about her optimism, about her being the most optimistic person in the building, and then, at some point, he stopped arguing.
The thirty seconds came, eventually. They looked like a court ruling in September 2024 and an election night two months later and a December headline beside Taylor Swift's. They were followed, as the thirty seconds always are, by another year in the studio: the attorneys general, the Khamenei market, the Santos ban, the Netflix documentary trailer Kalshi demanded be taken down as "a sensationalized film built on fiction," the perpetual futures that put the company in direct competition with the CME, the exchange she had once said she meant to outlast. A position, once taken, has to be held.
Her morning routine, as she described it to Max Raskin, is plain. NPR's News Now and Up First while she gets ready. The Bloomberg summaries and The Wall Street Journal on the way in. A few minutes with the dog. Before any of that, though, there is one ritual, and it is not hers alone; it is a country's, carried north in a dancer's luggage, through Cambridge and the Financial District and a SoHo office full of screens quoting the odds on everything.
Every morning she gets out of bed with her right foot first. It's a Brazilian thing, she explained, so that it's a good day.
Part IIThe Playbook
What follows distills the operating logic behind Kalshi's rise into principles that apply beyond prediction markets. Several are drawn from Lopes Lara's successes; at least two are drawn from the places where her company's reality diverged from her stated intentions. Both kinds are instructive. The aim is not to mythologize a founder who is still mid-trade, but to isolate the decisions — the spreadsheet of lawyers, the lawsuit, the division of the company along an inside/outside seam — that would hold up in a different industry with a different regulator.
The Lopes Lara Playbook
- 1.Measure regulatory traction as if it were revenue.
- 2.Price the pain against the thirty seconds.
- 3.Look for the trade that is always once removed.
- 4.Use naivety deliberately, then retire it.
- 5.Sue when the alternative is a permanent ceiling.
- 6.Split the company along the inside/outside seam.
- 7.Recruit investors who have lived the story you're telling.
- 8.Make composure a visible operating signal.
- 9.Choose the source of truth before the dispute.
- 10.Enforce publicly; legitimacy is a performance.
- 11.Let the volume tell you what the company has become.
- 12.Expect victory to relocate the fight.
Principle 1
Measure regulatory traction as if it were revenue
At Y Combinator, while their batchmates charted user growth, Lopes Lara and Mansour tracked "regulatory traction" — concerns resolved, analyses delivered, objections retired. That reframing did more than console two founders with no product. It gave a pre-revenue company a metric that could be managed weekly, presented to investors, and used to keep a team of Citadel-caliber engineers focused through roughly two years without a launch.
The deeper move was treating the CFTC as a customer whose objections were feature requests. Each round — manipulation risk, surveillance, settlement definitions — was answered with data analysis on comparable markets and with systems actually built. "We really just don't take no for an answer," she said. "We would just go back and do data analysis, legal research, all of those things to prove that we were right." The output of those two years was not just a license; it was the forty-page contract template, the surveillance stack, and the collateral model that became the product.
In industries where permission is the bottleneck — health, finance, energy, aviation — the first product is often the regulatory file itself. Founders who treat it as overhead underinvest in it; founders who treat it as the product build the moat that later competitors cannot cross quickly.
Tactic: If your business requires a license, define three to five measurable regulatory milestones, report them to your board with the rigor you'd apply to revenue, and staff them with engineers, not just lawyers.
Principle 2
Price the pain against the thirty seconds
"I'm going to work hard a full year so that I have 30 seconds on stage." Lopes Lara's account of ballet is, structurally, an expected-value calculation: an enormous, certain cost against a brief, uncertain payoff, accepted because the payoff is worth the cost and nothing else gets you there. She explicitly connects it to company-building — "it's going to be a very hard three years, but if it works out… that's something I'm comfortable with."
The lesson is not "endure." Plenty of founders endure the wrong things. It is to make the trade explicit: to know what the thirty seconds are, roughly how long the year will be, and whether the ratio is acceptable before signing up. Kalshi's thirty seconds were legal permission to list event contracts at scale; the year was closer to six. The founders could sit through it because they had defined the prize precisely and did not confuse interim discomfort with evidence that the thesis was wrong.
There is a cost to this disposition, too. A person trained to treat pain as the price of the stage may read every signal of trouble as more of the same. The discipline lies in distinguishing pain that is part of the path from pain that is information.
Tactic: Before committing to a multi-year effort, write down the specific payoff, your estimate of the time to reach it, and the two or three signals that would tell you the pain has stopped being the price and started being the verdict.
Principle 3
Look for the trade that is always once removed
Kalshi's founding insight came from observing a recurring workaround. At Bridgewater, Citadel, Goldman, and Five Rings, the founders watched traders express views about Brexit or an election by shorting the pound or the S&P — proxies that could be wrong even when the view was right. "Why isn't there a place for people to do this?" is the question that only occurs to someone who has seen the workaround in enough places to recognize it as a pattern rather than a quirk.
She credits the breadth of the internships specifically. "Giving yourself a lot of breadth, especially when you're in college is very important to just understand the industry as a whole, understand when there are gaps." Engineering at one firm, trading at another, research at a third: the rotation exposed the same improvised behavior from three angles.
Durable new markets often come from formalizing what sophisticated people are already doing awkwardly. The awkwardness is the opportunity.
Tactic: Catalog the expensive proxies people in your industry use to approximate something they actually want, and ask what it would take to sell them the thing directly.
Principle 4
Use naivety deliberately, then retire it
"One of the reasons I think Kalshi ended up working out was because of how naive we were and how stubborn we were," she told CNBC. Sixty-five lawyers said the CFTC had already refused. Experts at YC put their odds at zero. The founders' reasoning — "we solve hard math problems, we're going to figure out this regulatory government problem" — was, by any reasonable base rate, wrong. It worked because the base rate was built on prior applicants who had not done the work they were prepared to do.
Michael Seibel's advice crystallized this: the experts "are just normal people like you are." That is not an argument that experts are wrong. It is an argument that their certainty is a forecast based on past cases, and that a sufficiently different approach is a new case.
But naivety has a half-life. The same instinct that ignored the lawyers in 2018 is dangerous when applied to, say, how state attorneys general will respond to a sports product that looks like a sportsbook. Kalshi's later legal entanglements suggest the hardest part is knowing when to stop treating "everyone says this is impossible" as a signal to proceed.
Tactic: When experts declare something impossible, ask what specific failure they are extrapolating from; if your plan addresses that failure directly, proceed — and if it doesn't, listen.
Principle 5
Sue when the alternative is a permanent ceiling
The lawsuit against the CFTC is the defining decision of Lopes Lara's career, and it was made against the advice of her lead investor and her co-founder. Alfred Lin warned they would die getting there. Mansour tried to stop the filing the night before. She refused.
The decision makes sense as asymmetric risk. The status quo was an agency with a de facto veto over the company's most important product line. That is not safety; it is slow strangulation with a stable-looking balance sheet. Against that, litigation risked the company but offered a precedent that would unlock an entire category. The payoff, when it came, was not linear: a million customers in two weeks, a hundredfold expansion on a team of twenty-five.
⚖
The Road to Election Markets
From license to lawsuit to precedent: the regulatory arc that defined Kalshi.
2018
Kalshi founded in San Francisco; founders cold-call a spreadsheet of 65 lawyers.
2019
Y Combinator hackathon win and admission to the YC batch.
2020
CFTC designates Kalshi a contract market in November.
2021
Public launch in July; founders named to Forbes 30 Under 30 in December.
2023
Six senators urge rejection in August; CFTC rejects congressional-control contracts in September; Kalshi sues.
2024
D.C. District Court rules the CFTC overstepped; appeals court denies stay on October 2; election markets relaunch.
2025
Valuation climbs from $2B in June to $11B in December.
2026
$22B valuation in May; CFTC sues states to defend its exclusive jurisdiction.
The broader point: deference to a regulator is a strategy, not a virtue. Kalshi spent years being the most cooperative applicant the CFTC had seen, which gave it credibility when it finally argued in court that the agency had exceeded its authority. Cooperation first earned the standing to fight later.
Tactic: Separately estimate the cost of a permanent "no" and the cost of losing a fight; if the first is close to the second, the fight is cheaper than it looks.
Principle 6
Split the company along the inside/outside seam
Kalshi's founders divide responsibility cleanly. Lopes Lara "leads everything internal, from product design and engineering to general operations," as Fortune put it; Mansour handles regulators, investors, and the public. The split lets each specialize, and it gives the company a single external voice in an industry where mixed messages to regulators are costly.
What makes it work is that the seam is about attention, not temperament. The external CEO is the self-described paranoid risk manager; the internal COO was the one who insisted on suing. A clean split of duties did not prevent the "inside" founder from driving the most important "outside" decision — and that is a feature. Co-founders who are complementary in role but willing to cross into each other's domain at moments of consequence get the efficiency of specialization without its blind spots.
Mansour's account of arguing with her optimism for years and then stopping is instructive. Productive co-founder relationships are not frictionless; they are calibrated.
Tactic: Divide founder responsibilities by internal versus external focus, but agree in advance which decisions are big enough that both founders must weigh in regardless of whose domain they fall in.
Principle 7
Recruit investors who have lived the story you're telling
The Series A was assembled with intent. Alfred Lin of Sequoia brought a statistics PhD and a track record backing category-creating companies. Then the founders deliberately "tried to fill the round with Wall Street investors that could really help us navigate this industry": Henry Kravis, and Charles Schwab, who told them their early days looked like his own.
These were not trophy names. They were proof points, to regulators and future partners, that serious finance considered the idea legitimate — and advisers who had personally fought incumbents for access. Ali Partovi, who made both introductions, also became one of the founders' most important mentors on the non-technical work of being a founder: "how to deal with employees, growing pains, negotiation."
Tactic: When building a cap table for a regulated or credibility-sensitive business, prioritize investors whose own biographies make your case for you — people who have already won the argument you're about to have.
Principle 8
Make composure a visible operating signal
During the hour before the court ruling, Lopes Lara did not check her phone. When the ruling came, the office celebrated — and was back at work twenty minutes later. Both details matter. The first signaled to an important investor in the room that the company's leadership was not hostage to the outcome. The second signaled to the team that even a company-defining victory was a waypoint.
Composure in a founder functions as information for everyone watching. Employees calibrate their own risk tolerance to it; investors read it as a proxy for decision quality. Twenty-five people with high-paying alternatives stayed through failures and layoffs, and the steadiness at the top is part of why.
The ballet origin of this trait is less mystical than it sounds. Holding a position through pain until the pain stops registering is trainable. So is not reaching for the phone.
Tactic: On the day of a binary outcome, schedule ordinary work and keep it; then cap the celebration or the mourning at a defined window and return the team to the plan.
Principle 9
Choose the source of truth before the dispute
Kalshi's contracts run to forty pages specifying sources, thresholds, and edge cases. When Maduro was captured but still listed in Venezuela's official org charts as president, Kalshi resolved the market to him, because the source of truth had been chosen in advance. "That source of truth cannot change," Lopes Lara said. "Otherwise it becomes so, you know, like subjective."
This is how trust gets built in any system that adjudicates outcomes: marketplaces, insurance, performance compensation, internal OKRs. Predictability beats intuitive fairness, because participants can price rules they know but cannot price discretion.
The Khamenei contract is the counterexample that proves the rule. Wording the company itself called "grammatically ambiguous" cost about $2.2 million in reimbursements and a round of damaging press. Ambiguity is not a neutral drafting choice; it is a deferred liability.
Tactic: For any metric, contract, or incentive you adjudicate, name the specific data source and the edge-case rules before anyone has money or status riding on the answer.
Principle 10
Enforce publicly; legitimacy is a performance
Kalshi publicized its fines against a MrBeast editor and three congressional candidates, and imposed its first-ever lifetime ban on George Santos — its own former paid spokesman — along with a $70,000 penalty. Each enforcement action was a news event, and each told users and regulators the same thing: prices on this exchange reflect information, not inside knowledge.
Private enforcement protects a platform. Public enforcement markets it. In a category whose critics argue it invites manipulation, visible punishment is one of the few credible ways to demonstrate the opposite. Banning one's own spokesman is the kind of costly signal that is hard to fake.
Tactic: When you catch a violation of your platform's integrity, especially one involving an insider or affiliate, make the consequence visible enough that it becomes part of the brand.
Principle 11
Let the volume tell you what the company has become
In 2022, Lopes Lara described a hedging exchange: ice cream trucks, mortgage rates, Burger King and its plastic straws, no war contracts, no gamification. By 2025, sports drove 89 percent of revenue. The users had answered a question the founders had not exactly asked.
◐
Thesis vs. Volume
What the founders described in 2022, and what the platform became by 2026.
| 2022 stated vision | 2025–26 reality | Status |
|---|---|---|
| Hedging tool for businesses and households (rain, rates, inflation) | Sports above 90% of activity; 89% of 2025 revenue | Diverged |
| "Not gamified"; Robinhood cited as the cautionary example | Robinhood's prediction hub runs on Kalshi; student ambassador program withdrawn after backlash | Diverged |
| No contracts on war, terrorism, assassination, or violence | Gaza famine classification market; $54M Khamenei contract frozen | Contested |
| Fully cash-collateralized, no leverage | Perpetual futures launched in 2026 on crypto, with talks on metals, FX, energy | Evolving |
| Prices as a "source of truth" for forecasting | Fed researchers find macro markets useful; Semafor notes high precision in economic markets | Validated |
| Distribution via brokerages | Robinhood, Webull, CNN, CNBC, Fox, AP data partnerships | Achieved |
None of this means the original thesis was false; the macro markets are, by multiple accounts, the platform's most accurate. It means the founders built a general-purpose instrument, and the public decided what it was for. The strategic error available to any founder is to keep describing the company in the language of the pitch deck while the revenue line describes something else — because regulators, critics, and courts will read the revenue line.
Tactic: Once a year, describe your company using only its revenue mix and user behavior, then compare that description to your public positioning and close the gap in one direction or the other.
Principle 12
Expect victory to relocate the fight
Winning against the CFTC did not end Kalshi's regulatory battles. It multiplied them. Massachusetts, Michigan, Arizona, Ohio, Nevada, Washington, Wisconsin, Minnesota, and New York each pursued action; tribal nations sued; 55 countries restricted access, including Lopes Lara's own Brazil. The adversary changed from one federal agency to dozens of state and foreign authorities, each with its own theory of what Kalshi is.
Kalshi's response — relying on federal preemption, removing cases to federal court, and benefiting from the CFTC suing states on its behalf — has produced wins (Arizona, Minnesota) and losses (Massachusetts, Ohio, Washington, Nevada). The lesson is that a single decisive victory can create a category, but a category invites jurisdictional challenges that no single victory resolves.
Tactic: After any breakthrough approval or ruling, map every other authority that might claim jurisdiction over what you now do, and budget for those fights before they arrive rather than after.
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Part IIIQuotes and Maxims
In their words
— Luana Lopes Lara, Masters in Business, April 2022There's nowhere to hide, you need to be completely on, you need to give it your all.
— Luana Lopes Lara, Masters in Business, April 2022I think a lot of times people are making the short-term trade-off for speed. And in finance, I think it's different.
— Luana Lopes Lara, CNBC Changemakers and Power Players, March 2026One of the reasons I think Kalshi ended up working out was because of how naive we were and how stubborn we were.
— Luana Lopes Lara, Masters in Business, April 2022The bets that seem ridiculous at first and there's a lot of debate, then there's no way that it's going to work, are usually the ones that are achieved, like the large outlier results.
— Luana Lopes Lara, to Fortune, April 2026It was pretty surreal. But it doesn't change anything at all. It's just company stock.
Maxims
- Regulation is the product. When permission is the bottleneck, the regulatory file is the first thing you ship.
- Name the thirty seconds. Endurance is only rational when you know exactly what the payoff is and roughly what it will cost.
- Hunt the proxy. Wherever smart people trade something adjacent to what they actually want, a direct market is waiting.
- Experts are forecasters, not oracles. Their certainty extrapolates from past cases; make sure yours is a new one.
- A permanent no is a death sentence with a delay. When the status quo is a ceiling, the fight is usually cheaper than it looks.
- Specialize by seam, converge on stakes. Divide the company inside and outside, but make the largest decisions together.
- Composure is contagious. The team prices its own risk off the founder's face.
- Choose the source of truth before the money moves. Predictable rules earn more trust than fair-seeming discretion.
- Punish loudly. Public enforcement is how a market proves its prices mean something.
- Read your revenue line. The company is what the users do, not what the pitch deck says.
