Inside the 3-Year Battle to Legalize America’s Most Controversial Prediction Market

After years of lobbying for election prediction markets, Kalshi co-founder Luana Lopes Lara sued federal regulators rather than abandoning the idea.

BY LEILA SHERIDAN, NEWS WRITER

Luana Lopes Lara. Photo: Getty Images

Luana Lopes Lara spent years training as a ballet dancer before she ever started a company. And the discipline remained long after she left the studio. She embraced waking up early, waking early, repeating the same movements for hours, and trusting that progress would come long after the work was done.

That mindset would become essential when Lara co-founded the prediction-market startup Kalshi, a company that would spend years fighting regulators before it could fully realize its vision.

Kalshi operates a federally regulated marketplace where users trade contracts based on the outcomes of real-world events. Traders can buy “yes” or “no” positions on questions ranging from inflation rates to weather patterns, with prices fluctuating according to the crowd’s belief about the likelihood of an outcome.

By late 2023, the platform had roughly 1.3 million users across the U.S., who traded about $21 million in notional volume in a single month. But the company’s most ambitious goal went far beyond markets for economic data or weather forecasts.

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“The biggest dream of ours was having election markets legal in the U.S.,” Lara said during a talk at Citadel Securities’ Future of Global Markets conference.

For Lara, the fascination with prediction markets began during internships at quantitative trading firms including Bridgewater Associates, Five Rings Capital, and Citadel Securities. The experience exposed her to sophisticated financial markets, but it also raised a deeper question about her own career.

“When I’m 50, am I going to be happy?” she recalled asking herself. Her answer was no.

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