ProphetX vs Kalshi

Vanderbilt classmates Dean Sisun and Jake Benzaquen founded Prophet Exchange in 2018 after studying European peer-to-peer exchanges like Betfair and wondering why American sports bettors were still forced to pay 10% bookmaker margins. Raising an initial $10 million from Ninja Global, Bellevue Unbound, and former Match.com CEO Sam Yagan, the duo spent four grueling years negotiating with state gaming authorities. On August 30, 2022, Prophet Exchange made history by launching in New Jersey as the first licensed peer-to-peer sports betting exchange in United States history. By matching retail bettors against each other, the platform guaranteed the best odds in the state, completely eliminating the vigorish.

However, the state-by-state regulatory model quickly proved to be a gilded cage that almost killed the company. Expanding state-by-state required paying millions in local licensing fees, securing brick-and-mortar casino partners, and geofencing liquidity within individual state borders—destroying the deep national order book required for a thriving exchange. By late 2023, while traditional sportsbooks burned hundreds of millions on promotional promos, Prophet Exchange found itself squeezed by razor-thin margins and isolated liquidity pools. Recognizing that state gaming laws were fundamentally hostile to financial exchange architecture, Sisun and Benzaquen executed a radical strategic pivot: they shut down the New Jersey betting app in mid-2024, rebranded to ProphetX, and transitioned entirely to federal CFTC event contract regulation.

Full profile: ProphetX →

Tarek Mansour grew up in Algeria and came to MIT on a scholarship. Luana Lopes Lara grew up in Brazil, the daughter of a schoolteacher, and danced at an elite ballet academy affiliated with the Bolshoi before choosing mathematics. They met in an MIT classroom, ended up in many of the same courses, co-authored papers, and interned at the same firms — Mansour at Goldman Sachs and Citadel, Lara at Bridgewater and Citadel. What they observed across those firms was the same thing: an enormous amount of financial decision-making was being driven by opinions about future events, but there was no clean, direct way to trade on those events. You could trade the equity of a company that would be affected by an election result, but you could not trade the election result itself. In 2018, they founded Kalshi to close that gap. The approach was different from every prediction market before them: instead of operating offshore, accepting cryptocurrency, or relying on a fragile regulatory no-action letter, Kalshi would become a fully licensed US exchange. They joined Y Combinator in 2019 and spent the next two years in direct negotiation with the CFTC — a process that had never been completed by a prediction market operator.

The CFTC approval came in November 2020, making Kalshi a Designated Contract Market — the highest regulatory designation available and the same category as the Chicago Mercantile Exchange. Mansour and Lara were among the youngest founders to win CFTC approval in over a decade. The platform launched its first contract in July 2021. Sequoia Capital led a $30 million Series A. Henry Kissinger and Robert Shiller joined as advisors. The 2024 presidential election was the inflection point: over $800 million was wagered on political markets. When the CFTC under the Biden administration moved to block Kalshi's election markets — arguing they were contrary to the public interest — Lara made the call to sue the federal government. "The only option," she later said, "was to sue." Kalshi won in federal court in September 2024. The ruling opened election markets. Sports markets followed. $238 billion in annual trading volume followed that.

Full profile: Kalshi →