Kalshi co-founder Luana Lopes Lara on the biggest prediction markets risks she has ever taken

Luana Lopes Lara, co-founder of Kalshi, spends all day thinking about probabilities. Coming out of an elite math degree background and positions at some of the most successful hedge funds in the world, a mindset focused on thinking clearly about potential outcomes comes naturally to her. But the youngest self-made female billionaire ever still had to overcome steep odds in betting on herself and that she could build the largest prediction markets trading business in the U.S. She says it would not have happened without an approach to risk-taking that many people, especially women, don’t follow.

Kalshi, founded in 2018 by Lopes Lara and Tarek Mansour as MIT classmates, allows users to trade contracts tied to real world outcomes in areas as diverse as weather, sports, pop culture, economics, and politics. Users buy “yes” or “no” contracts tied to whether an event will occur, and prices reflect that probability.

But the seemingly simple idea took years to become a new type of regulated financial market, with the co-founders facing many government battles and skepticism from their own board. When Lopes Lara and Mansour first started on the project, many people told them it would not work. “[It] was many, many years of it looking like it was going nowhere,” Lopes Lara told CNBC’s Julia Boorstin during the latest episode of the “CNBC Changemakers and Power Players” podcast.

Lopes Lara was named to the 2026 CNBC Changemakers list.

Kalshi spent years navigating the regulatory process before receiving approval from the U.S. Commodity Futures Trading Commission in 2020, which oversees derivates markets in the U.S. Lopes Lara said that period tested the founders’ belief in the concept. “We talked to a lot of people at the time and they were like, “that’s impossible. The odds are lower than 1%. You’re never going to make that happen,” she recalled.

Being somewhat naive, but also driven given their background working on math degrees at MIT, may have helped the co-founders push forward, she said, even though they had no experience starting companies. “We solved hard math problems, [and] we’re going to figure out this regulatory-government problem,” she recalled of their mindset. At the end of what she described as “all-nighters” at MIT, “we were like, why don’t we just try to do this? Because we’re putting so much time into this and at some point we should just probably try and see if we can get this somewhere. If someone is gonna make this happen, it should be us. … We were so in love with this problem and this idea,” she said.

Instead of backing away when regulators raised concerns, the founders repeatedly returned with legal research and data analysis to defend their case for prediction markets. The culmination of the years-long battle was when Lopes Lara made the call to sue the U.S. government over election markets ahead of the 2024 presidential contest after discussions with regulators stalled. “[One of] the biggest events every four years in the world is the American election,” Lopes Lara said. “Election markets really are the holy grail.”

The company spent more than two years with the CFTC trying to get election markets approved and ultimately Lopes Lara decided, “the only option” the company had was to sue the government.

The forces pushing against her in that decision included the company’s board. “For almost two years, at every board meeting, we would go in and tell the board, ‘We’re working on elections. We’re working on elections. We’re working on elections.’ … They would always say, ‘It’s not working. It’s not working. It’s not working.'”

She had to tell the board that the founders, with her leading the call, had decided to sue even though the board had been advising them to focus on other business opportunities. But to Lopes Lara, it was simple. The odds were in their favor. “It makes no sense to not do this,” she recalled thinking at the time. While the board ultimately supported the decision, the month leading up to the court decision was one during which Lopes Lara says, “I didn’t sleep. I didn’t work out. I was just almost like a potato just walking around trying to handle everything.”

Kalshi won the case, and the results speak for themselves. Since that legal precedent, Kalshi has grown to $2 billion in transactions per week. The week of the New York City mayoral election, Kalsi did over $130 million in election-related transaction volume. More recently, Kalshi recorded around $1 billion in trading volume during the Super Bowl. The company recently raised $1 billion from investors at an $11 billion valuation.

Kalshi is continuing to shape events today, with contracts on recession risk from the U.S.-Iran war among trades that have been created tied to recent news. But that growth has not come without controversy, with trades related to U.S. military actions receiving swift backlash, including from Congress, and broader concerns about insider trading. Kalshi is also involved in multiple legal disputes over whether its contracts should be regulated as gambling under state laws as the gaming industry pours significant resources into lobbying efforts targeting what it sees as a prediction markets loophole.

Lopes Lara said she strongly believes in both the company’s legal arguments and its future. However, she first had to map out all of the possible scenarios for the company when first deciding whether to found it, and be prepared for every potential outcome including failure. She used a very Kalshi-esque approach to that decision.

“The best way that I think about making decisions is: you make sure you have all the data that you can about the situation, and then you map out possible scenarios, and then you put probabilities into them,” Lopes Lara said.

The approach reflects her broader philosophy regarding risk and entrepreneurship. She believes many people avoid pursuing ambitious ideas because they focus too much on the downside, but in her experience the worst outcome is often less severe than people believe.

“Most people, I see that they’re afraid of taking risks … they’re so worried about the downside. They’re so worried about what’s going to happen if things go wrong. But most of the times people are overthinking it,” Lopes Lara said. “If I leave my job to do this … and it fails, it’s over. No, you probably just get another job and you’d be maybe a little bit behind where you are now. And maybe you won’t get one promotion, and that’s kind of the level of it. It’s very easy to trick yourself into rationalizing the fear of taking risk,” she said.

“When you actually map out the whole tree, you’re going to realize that most of the time it’s just not that bad. Obviously, there’s a lot of financial risk, all those things, a lot of other considerations. But I think people, especially women, just need to take more risks and be honest with themselves about why they’re not doing it. Cause I think a lot of times it’s just fear.”

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Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.