Election night at Kalshi HQ

This is an excerpt from Sources by Alex Heath, a newsletter about AI and the technology industry, distributed only to The Verge subscribers once a week.

At 8 p.m. on election Night in New York City, I arrived at an unremarkable office building in the Meatpacking District.

Inside, a few dozen young Calci employees were moving between desk sets, pizza boxes, and a large projector displaying live markets for the day’s main races. The atmosphere was calm but focused. Numbers flash on the screen as bets are adjusted in real time.

Near the projector, co-founders Tarek Mansour and Luana Lopez Lara spoke with a CBS News crew to film a segment the next morning. CBS had just called the Virginia governor’s race. Mansour pointed out that the Kalshi Market expected the result about an hour ago.

I was expecting a trading floor atmosphere. Instead, the office felt weak. “I think the situation is calmer than usual because there is less volatility on this matter,” Mansour told me later from a small conference room. The New York mayor’s race has long been priced as a landslide. Zahran Mamdani had about a 95% chance of winning in Kalshi (and its rival Polymarket) even before the polls closed. However, that day Calci went through about $100 million worth of trades in the New York race.

In recent months, I have been tracking the rise of prediction markets and especially Calcci. Although it is federally licensed and much larger than Polymarket, it is the latter that dominates the conversation in technology circles. Mansour wants to change that.

“It can be said that Kalshi is one of – perhaps the “The fastest growing companies in America this year,” Lee said. “We’re doing $1 billion in transaction volume a week now.” Last year, the company saw just $300 million for the entire year. Mansour declined to reveal revenue figures, but even with a 1-2% fee per deal, accounts indicate that business is booming.

Three factors have fueled that growth this year: obtaining a federal license to operate, expanding into sports betting, and partnering with Robinhood to support prediction markets. While sports were a major attraction, Mansour’s ambitions go beyond that.

“I believe prediction markets are the next generation of the stock market,” he said. “It has informational consequences. Everyone is an expert in something – everyone has opinions. These markets put a price on those opinions.”

He hinted at new partnerships with media and even links to entertainment events. “We will be doing a lot more with news networks in the coming months,” he said. “If the truth that comes out of these markets becomes mainstream, then we will have essentially accomplished our mission.”

Given how new prediction markets are, Calci and Polymarket still need to prove that they can remain reliable sources of election forecasting. Fox News Its reputation took a hit because Arizona mistakenly called Joe Biden too early in 2020. Meanwhile, Calci and Bullemarket brag about calling races even before the results are in. If someone makes a mistake in a major race, it could call into question the legitimacy of prediction markets.

With less than an hour left before the polls closed, Mansour showed me the data from the New York mayoral race. Voters in the city were buying Andrew Cuomo’s contracts more, but Mamdani dominated elsewhere. He was winning among women and younger traders. Cuomo’s support has skewed older and male.

As we spoke, Calci called the New Jersey governor’s race at 8:20 p.m. — 32 minutes before any media outlets. Mansour compared Kalshi’s role to that of financial markets: “Should the stock market replace bank analysts? No. Analysts provide inputs, and the market finds the real price. We do the same for events.”

I asked him if people were constantly texting him for forecasts, especially on election night. He laughed. “Yes. But I tell them: just look at the market. I don’t have any additional information.”

As 9pm approached, I assumed he would remain in the office as the polls closed. But when I got into my Uber, I saw him get out and get into another car down the street.

He didn’t need to wait. Kalshi called the New York race for Mamdani one minute after the polls closed and 36 minutes before any media outlets.