Prof G Markets Prediction Markets vs. Gambling: Where’s the Line? — ft. Tarek Mansour
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Feb 27, 2026 
Tarek Mansour, co-founder and CEO of Kalshi and former quantitative trader at Goldman Sachs and Citadel, explains why prediction markets are booming. He discusses how they differ from gambling, the guardrails Kalshi uses to prevent abuse, how insider trading is detected, and real-world uses like hedging hurricanes and informing policy forecasts.
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Why Prediction Markets Are Surging
- Prediction markets gain trust because participants put real money behind forecasts, producing crowd wisdom that's often more accurate than polls or news.
- Tarek Mansour cites distrust in traditional news and a Fed paper showing Kalshi forecasts beat surveys on Fed decisions and CPI.
Power Users Build Models And Drive Volume
- Power users drive much of Kalshi's volume by building models, scraping data, and forecasting frequently.
- Tarek mentions a New York Times profile of a trader who uses spreadsheets and models to forecast economy and markets on Kalshi.
Exchange Model Reduces Casino-Like Incentives
- Kalshi argues its marketplace model avoids the perverse incentives of casinos because the platform takes a small fee and users trade with each other, not against the house.
- Tarek contrasts casinos (revenue = customer losses) with Kalshi's neutral exchange design that allows guardrails instead of addiction-driven optimization.