Kalshi Inc. co-founder and Chief Executive Officer Tarek Mansour has an argument why prediction markets shouldn’t be regulated as gambling. Traditional sportsbooks, he argues, are “essentially a product that is designed for customers to lose.” Sportsbooks profit from customer losses, making them structurally predatory. Kalshi, by contrast, operates as a peer-to-peer exchange: customers bet against each other, Kalshi takes fees from both sides, and the house has no stake in the outcome. It’s a financial market, not a casino.
He’s right about the business model distinction. He’s wrong that it answers the regulatory question.
What Mansour is describing — a balanced book, fees on both sides, no house risk on outcomes — has been the operating model of sports betting, both legal and illegal.
