00:00It's notable that we talk about Kalshi because you have a great profile out about one of Kalshi's
00:04co-founders, MIT background. She's from Brazil. She's a former ballerina. Tell us
00:08all about Luana Lopez Lara. So Luana is one of the co-founders of Kalshi. She's 30 years old and
00:16already she's worth $2.6 billion after Kalshi raised quite a significant sum of money in the
00:22last year. And that's just one of her accolades, right? She's also the chief operating officer of
00:26the company. She's a former ballerina and they started Kalshi a few years ago, took on the CFTC to be
00:31able to offer
00:32event contracts and now the largest U.S. regulated provider of prediction markets. There's also Polymarket, another big
00:38rival that's offshore for now, but it does have a U.S. app. And that's really how the prediction market
00:43space is playing out
00:44at the minute. We do have some sports books coming into the fray. Providers like Robinhood are also seeking to
00:49provide
00:49contracts as well. So we're really seeing it grow and blossom. But Kalshi and Polymarket are the frontrunners.
00:53OK, so, Emily, the story is a great one. And what got my attention was the mention of Kylie Jenner
01:00because I like
01:02following celebrity news. But also, Emily, what happened with Kylie Jenner that kind of gave Luana Lopez-Lara the
01:09inspiration for prediction markets? What was it about Kylie Jenner that kind of got her creative juices going?
01:17So back in early 2018, it was when Luana and her co-founder Tarek Mansell were both interns at Citadel.
01:24Luana was thinking about, and at Five Rings, sorry, Luana was thinking about where or not they could
01:31evolve kind of the ways in which they could trade on certain topics. They were thinking about market
01:34making, doing training exercises while at both of the hedge funds. And at Five Rings is where Luana was
01:40thinking about what was going on with Kylie Jenner, because at the time, Kylie Jenner was rumored to be
01:44pregnant. That's a thing that actually turned out to be true. Jenna kept her pregnancy secret for the full nine
01:49months until she gave birth. And Luana was thinking, well, I would love to place a bet on this. But
01:53there was nowhere to do so. Another intern actually said to Luana, you know, well, there's really nowhere
01:58for this to happen. And that was one of the things that inspired them to create Kalshi later on that
02:02year. You know, it's funny because a lot of the attention that these platforms get, Polymarket
02:07included, has to do with sort of these whisper markets or these events that aren't traditional things you can bet
02:13on, like the pregnancy of a celebrity or whether a celebrity will show up at a certain game, for example.
02:18But at the
02:19end of the day, so much of what happens on the platform is still sports betting, right?
02:27Yeah, I think the last count, it was about 80 percent of Kalshi's volume is sports betting. And with the
02:32World Cup and
02:33and Knicks games last week, that is only going to be rising, I can imagine, because it's driving just
02:38so much volume. As you said at the beginning of this, Kalshi hit a new weekly record last week with
02:42$5.1 billion in trading volume. So we're really seeing World Cup bets power them to new records.
02:47And especially with Knicks in five, they're really fostered a lot more. Kalshi itself has
02:51sponsored, for example, part of the Madison Square Garden where the Knicks was playing last week. So
02:55we're really seeing the two of them integrate a lot in that as well.
02:59You know, I think about Kalshi and how Tarek Mansour has really kind of become the public
03:03face of the company. But Luana is the co-founder and she's also the COO. Just give us a sense
03:10of
03:10her responsibilities at the firm. Right. So as you say, Tarek is the CEO. So he's the one who
03:18kind of does all the public facing stuff. But Luana is the one that's controlling things behind the
03:21scenes. She oversees business areas like market listings, design, engineering. These are all kind
03:27of the day to day operations that keep the company running. And she's very hands on in that. What
03:31she was telling me is that, you know, she's having meetings every week with different teams doing
03:35deep dives into what they should focus on next. She's also a big focus of their legal strategy.
03:40So Kalshi is currently fighting quite a number of lawsuits across the U.S. where states are challenging
03:44its ability to offer sports betting in those areas. And they have to meet with their legal team
03:48every week to decide, you know, which case are we focusing on? What's our strategy here? And she's a big
03:53part of that as well. You wrote this profile of Lopez Lara. But you also have a story out that
04:00that came out around the same time about something that nobody outside of Kalshi really knew about.
04:04And it's this agent Harrison that's being used inside the company right now. What is what is Harrison
04:11doing that that people used to do? What kind of work can it do? What kind of work will it
04:16be able to do?
04:18So the way in which prediction markets operate, if you think about them as event contracts,
04:22you know, it's they're always having to look for if the news is breaking that decides that an event
04:27has finished because you can be trading for ages on, you know, if Taylor Swift is going to be pregnant
04:30or if, you know, so-and-so is going to win a sports game. But you need to be notified
04:33when that
04:34thing actually happens. So what Harrison does is it continually is looking through the news,
04:39through social media, seeing if there's any markets that need determination and notifying people
04:43at Kalshi that that needs to happen. That's on the on the determination side.
04:47And then on the resolution side, it also kind of helps people decide, you know, like if one person
04:51puts in an answer saying this is how it should resolve. Another person does the same.
04:54Harrison can check that those answers match. This is an area that's really important for
04:58prediction markets because we've seen quite a few times where if rules for a market aren't clear
05:02enough, if there's gray area, it can really lead into issues with traders not getting paid out the way that
05:06they think they should. And so having another service to kind of backstop that is really
05:11interesting and is a good way of using AI in this case. Is Harrison backstopping or is it kind of
05:17going through the first layer and looking for areas that a human would need to come in and intervene?
05:23It does both. So in one way it kind of is helping to backstop. But like I said,
05:27we've got two people submitting a possible suggestion and Harrison is checking that those answers match.
05:31But it also can make its own suggestion as to how I think a market should resolve. And ideally you'd
05:35want
05:35all three of those answers to match as well. And in areas where the topic might be particularly contentious,
05:39say like a Supreme Court ruling, Kaoshi may also involve its chief regulatory officer to help weigh in
05:44on that matter too.
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