Kalsi says his company’s prediction market will compete directly with U.S. stocks within a few years

Kalsi is no longer simply aiming to carve out a space for themselves. It wants to compete head-on with the U.S. stock market.

Karshi CEO Tarek Mansour made that clear on Tuesday at the Futures Industry Association Expo in Chicago. “This is starting to look like a trillion-dollar market,” he said. “I always thought it was going to be pretty fast and pretty big. I just didn’t expect it to be that fast.”

The whole shift was accelerated last year after Mr. Kalsi defeated U.S. regulators in court to legally allow the public to bargain on the outcome of the upcoming presidential election.

Since that victory, things have moved faster than Tarek expected. Although he initially thought it would take a full decade for prediction markets to catch up with traditional stocks, Kalsi has already built what he calls “an entire class of active traders.”

Kalsi adds news and sports to fuel rapid growth

Kalsi didn’t stop at politics. The company has begun offering new markets related to sports, pop culture, and other current events, taking advantage of special regulatory settings to slip through the cracks in states where sports betting is banned or severely restricted.

Tarek said more sports-related deals are coming soon. “I think prediction markets will be integrated into news very smoothly and very effectively,” he said, adding that he is also planning partnerships with major media outlets, although he did not name any of them.

What makes Kalshi different from typical betting platforms is how the betting works. Instead of setting odds like a sportsbook, Calsi sets binary questions with a yes or no outcome, allowing users to trade both sides of the prediction like a financial contract. This creates a kind of tug-of-war between users, rather than a house vs. you model.

Tarek insists it’s not gambling at all. “In gambling, the house always wins, but prediction markets provide a more level playing field,” he said. But not everyone buys it.

The Commodity Futures Trading Commission (CFTC) remains on Mr. Kalsi’s side, giving the exchange’s regulator assurances that it will continue to operate. However, some state-level gambling watchdogs ordered Kalsi to shut down. And courts in some states have already ruled against it, threatening the company’s nationwide expansion.

Tarek acknowledged that there is always a “strange tension around gambling” when it comes to new financial innovations, especially derivatives. The tension hasn’t gone away yet; in fact, it’s heating up.

Wall Street intervenes as rivals surround Kalsi

State regulators aren’t the only things Kalsi has to deal with. Gambling companies are also moving in to target the same users, and industry insiders say Kalsi and other prediction exchanges may struggle to compete with more mainstream betting products.

Still, Wall Street is starting to circle the area.

Intercontinental Exchange (ICE), which owns the New York Stock Exchange, has invested up to $2 billion in Polymarket, Carsi’s biggest rival.

Meanwhile, CME Group is working with Flutter Entertainment to build a new app that combines sports betting and financial data contracts.

Tarek says competition is okay. He believes it will move the industry forward faster. Karshi’s trading volume has grown rapidly, especially since partnering with Robinhood, which gives users direct access to its contracts. The company’s platform has also seen a surge, primarily driven by sports-related betting.

Looking to the future, Tarek said Kalsi will go global. The company plans to launch in multiple countries over the next 18 months, betting big on its unstoppable momentum.