Tarek Mansour, the Lebanese-American chief executive of prediction markets company Kalshi, said on Tuesday that despite growing political scrutiny and criticism, apps like his are here to stay.
Some public health experts have likened it to a gateway drug that fuels compulsive gambling, while casinos have accused it of skirting regulatory rules that they must follow.
Elected officials have alleged the use of deceptive advertising practices. The risk of insider trading and ethical concerns about people wagering on the outcome of wars, elections and human suffering are among the other concerns.
Mr Mansour, a Massachusetts Institute of Technology graduate who in 2018 co-founded Kalshi, now one of the world's most popular prediction market apps, spoke at a Washington event hosted by Axios. He said that company data shows 80 per cent of visitors to the website do not make trades.
“There's a general wave of people who come to prediction markets to check what's happening,” he said.
Thanks to an advertising blitz during the World Cup, Kalshi has become a top download in various mobile app stores.
The Trump administration has taken a hands-off approach to scrutinising prediction markets. President Donald Trump's eldest son, Donald Trump Jr, is a Kalshi strategic adviser.
Speaking at the same event, Michael Selig, chairman of the Commodity Future Trading Commission, defended the federal agency's desire to stop states from regulating prediction markets.
“We are seeing states attempting to nullify federal law, and we can't allow that for any type of derivative instrument,” Mr Selig said. “Congress gave us express exclusive jurisdiction over all commodity derivatives that includes a derivative on everything and anything.”
Still, political winds can shift quickly.
Polls show Mr Trump losing support before November's midterm elections. A Democratic takeover of either the House of Representatives or the Senate could result in greater regulatory scrutiny of Kalshi.
But Mr Mansour said Kalshi was not going anywhere, pointing to internal metrics and downloads showing growing public support.
“There's this general feeling that the traditional system, whether a financial system, the news, a variety of other systems, they're simply not working for people,” he said, boasting of the opportunities Kalshi provides to a different demographic.
“Our best inflation forecaster is a random guy in Kansas, has a blue-collar job and never really traded on the financial markets.”
He also addressed a Wall Street Journal story that said most customers using the platform end up losing money, while a small number of individuals use “data-driven algorithmic trading” and “take home most of the winnings”.
“I find this sort of point funny, right?” he said. “This is a game of scale, it's a highly competitive market and people are competing.”
Still, legislators have made some efforts to clamp down on prediction markets.
In May, a Google employee was charged with insider trading after using “confidential information from his employer” to place trading bets on Polymarket, a rival to Kalshi.
“Corporate insiders cannot use confidential business information to turn a profit in our markets,” said US attorney Jay Clayton.
In February, an Israeli soldier and a civilian were indicted in the country for using classified intelligence on Polymarket to bet on the likelihood of Israel carrying out military action.
Outside Tuesday's event, opponents of prediction markets set up a mobile billboard, funded by FairPredicts, which describes itself as “non-partisan market integrity watchdog.”
“Kalshi says it bans insider trading, but its CEO called it fair game,” one message read. Another panel accused Mr Mansour of deception for claiming Kalshi had “no house, it's people trading against each other”.
Mr Mansour said his company is “very stern about enforcing against any type of suspicious matters or unusual activity”.
He added that his company was US-based, onshore and regulated.
“That's completely unlike some of the stuff many are reading about these prediction markets that are offshore and unregulated,” he said.
