Luana Lopes Lara: Prediction market payout

12:12Simon Jack:Right. OK, good to know. Well, Luana's insight into all of this was that most trading happens, in her words, when people have some view about the future and then try to find a way to put that into the markets. But she thought there should be a way for people to directly trade on the probability of events rather than indirectly through traditional financial markets. Tarek immediately saw the potential in this idea. So together, they decided to create a business. And they called the startup Kalshi, which means everything in Arabic. And that was the core of the idea. So in Tarek's words, financialise everything.

12:45Simon Jack:Everything can be a tradable asset. The universe of what is tradable today versus what it can be is so small. Anything that has a difference in opinion can be traded someday.

12:54Zing Tsjeng:Yeah. So basically I could say, I think who's going to be the next James Bond or who's going to win the Best Actor Oscar or Actress Oscar. We have a difference of opinion. Suddenly that is a tradable asset. Anywhere where opinions differ, there's a potential trade there. But you need more than a good idea to become a billionaire. So a few months after graduating, they applied to something called Y Combinator, which we have come across on this program before. If you haven't listened to our previous episode on Sam Altman, the Y Combinator is this kind of accelerator for startups, which has created a lot of billionaires, companies like Airbnb, Reddit, Stripe, Twitch, Scale AI, another previous episode.

13:35Zing Tsjeng:And to win a place on it, Luana and Tarek flew to Silicon Valley and competed in a hackathon. It's kind of a computer programming sort of test. In 24 hours, they built a website, they presented it to Y Combinator's panel of entrepreneurs, pitching it as a New York stock exchange for events.

13:51Simon Jack:Very grand title there. Unfortunately, their prototype barely worked, but they were still accepted. A partner of Y Combinator, Michael Siebel, told them the idea was so unlikely to succeed, I had to take a chance. So from January to March in 2019, they spent three months in the intensive programme, that kind of hothouse programme. They got mentoring, Plus, they got$150 ,000 investment into Kaoshi. And around this time, Forbes published its first article about Kaoshi and its founders. And in it noted that a sizable portion of what they were hoping to do was still currently illegal.

14:25Zing Tsjeng:And let's unpack why that is, because the gambling and betting laws in the United States are quite different from elsewhere, certainly from the UK. Online gambling, sports betting, political betting was effectively illegal across most of the United States. However, in 2019, I remember this, it was a big moment, the Supreme Court struck down an act which made it illegal, which meant that states were free to legalise whatever they wanted in terms of betting on a state-by-state basis, so the state gets to decide. So it's created, if you like, a patchwork system where it's legal in some states, not legal in others.

15:00Zing Tsjeng:It's not ideal to build a big business when you have a patchwork.

15:02Simon Jack:Y Combinator's partner Michael Siebel said, the reason we don't see more tech startups tackle this opportunity is because of the regulatory barriers that make it hard to get a product up and running. But he added, the Kaoshi founders have the determination to overcome these regulatory challenges. Because Luana and Tarek had entered Y Combinator with a regulatory strategy. First, they positioned Kaoshi not as gambling. Oh, no, never gambling. this was a prediction market so they wouldn't use traditional gambling wages calci would use what

15:34Zing Tsjeng:they call event contracts yeah okay and it's a bit complicated this so bear with us so calci would allow users to sort of buy and sell this binary idea that either this event is going to happen which is a one or it doesn't happen it's a zero so and price between zero and one dollars and basically the market would set the probability of that happening and that's when people would exchange their ideas. So you might think that there's a 50 % chance that Callum Turner is going to be the next bond. I might think there's a 75 % chance of doing that. So I would basically be able to trade that thinking that I'm going to be more right than you.

16:11Zing Tsjeng:And so I will make money. So the contract settles at$1 if the event occurs, zero if it doesn't. And what this platform, Calci, is doing is matching our difference of opinion on an exchange. They're not betting their own money, they're matching people's differing opinions.

16:28Simon Jack:So for instance, imagine the event contract, will Zing Zing become a billionaire in this year? And it's trading at 25 cents for yes, meaning the market believes there's roughly a 25 % chance of that outcome. I've got to tell you that's a massive overestimate. Well, if you bought a yes contract at 25 cents, and I do indeed become a billionaire this year, you profit 75 cents per contract. So traders can also exit early by selling their position while it's still fluctuating. So in that sense, it's sort of like the stock market.

16:59Zing Tsjeng:So yes, so if I think it's there's a 25 % chance that you're going to become a billionaire, when you get to half a billion, the chances of that of that happening obviously have gone up because you're maybe it's a 70 % chance now that you're going to make it all the way to a billion, I can cash out my position now because I've taken it from 25 to 75. So in that sense, you're right. It is a bit like the changing fortunes of a company or a stock market. So, you know, in a way, you can sort of see the logical kind of leap they've made there.

17:28Simon Jack:I mean, your mileage may differ on this one. But if you're asking how does Cauchy actually make money off all of these event contracts, Cauchy would make that cash by charging a commission on every trade. So, of course, you know, it also has the potential to sell data to traders, to businesses, political parties, etc. Importantly, prediction markets were already regulated by the Commodity Futures Trading Commission, CFTC, under commodities law, not under gambling law. So event contracts like the one that Kaoshi was trying to produce are treated as financial derivatives rather than bets. So Kaoshi was saying, oh no, we're not your classic bookies or gambling firms.

18:07Simon Jack:We're actually a financial exchange for predictions.

18:10Zing Tsjeng:And this argument is absolutely fundamental to how this whole story pans out, because what they needed to do this was a federal license, federal meaning it'll work in every state, from the Commodities and Futures Trading Commission. But this is not going to be easy. There already existed some examples of prediction markets, but there were strict limits on the amount you could bet, sorry, trade, and the number of traders. Large scale, fully commercial event prediction platforms were not broadly approved. So they're breaking some new ground here.

18:40Simon Jack:And you might ask yourself, why is this the case? Well, the regulators had always been concerned about insider trading. Bingo. So a real world example from this very year, someone earned$400 ,000 in profit on a rival prediction market, not Cauchy, by betting the exact date that Venezuelan President Nicolas Maduro would be forced out from power. The suspicion, of course, was that they had prior knowledge that would happen on that day because they had some kind of, you know, real world link to the Maduro presidency. Similarly, there was a lot of activity on Kaoshi around military action in Iran.

19:14Simon Jack:And, you know, this is really worrying because it could incentivise investors to influence events in the world. So imagine you're a lawmaker who delays a bill because you can earn some big bucks on a prediction market. So this was always going to be an uphill struggle to get regulatory approval.

19:29Zing Tsjeng:I mean, the insider trading potential would seem to me to be vast. And indeed, that military bloke is being prosecuted for that particular example. And what is amazing to me is that if someone came and bet big on the exact date that a Venezuelan president was going to be forced out of office, I would go, hang on a second.

19:49Simon Jack:What do you know that I don't?

19:50Zing Tsjeng:What do you know that I don't? Exactly. So, you know, anyway, we'll get into that at some greater length. But Luana and Tarek said that one day at Y Combinator, the accelerator they were in, they cold called over 60 lawyers they found on Google. Every single one of them told them to give up. People have been unsuccessfully trying to do this since the 1980s. And Luanna and Tarek, they were too young, they're too small, Fry. And she said, right out of college, we were taking on an insane amount of risk. It was two years without a single product, nothing launched. And if we didn't get regulated, the company would just go to zero.

20:24Simon Jack:But then they found just the man that they needed, a guy who was a lawyer and former CFTC official called Jeff Bandman, who promised them that the landscape was changing. Jeff knew the CFTC. He knew the people inside. So he agreed to lead their regulatory strategy. Talk about an angel dropping from the sky.

20:41Zing Tsjeng:Well, this is interesting. There are very often these kind of non-player characters in these stories that seem to have just wander on to set in this drama and are absolutely pivotal. And Jeff Bandman, who I don't suppose anyone has ever heard of, is actually instrumental in this story. They had first approached the CFTC, the Commodity and Futures Trading Commission, in the spring of 2019. When COVID hit, Luana was in London, Tarek was at home in Beirut. He was there during that city's port explosion. I just remember that incredible boom that killed over 200 people. And for weeks, he would go searching for survivors during the day who work on Calci at night.

21:17Zing Tsjeng:But with the guidance of Jeff, Luana and Tarek spent over a year lobbying the commission on Zoom before each meeting. this is interesting, they would memorise a script that they were going to sort of, you know, pitch to them and they would memorise it word for word. So they were on message the whole time.

21:34Simon Jack:Now, during this time, Kaoshi wasn't the only game in town. A few competitors had popped up, most notably Polymarket, who unlike them hadn't sought regulatory approval and were letting people bet vast sums of money anonymously with cryptocurrency. But in this case, it actually helped Kaoshi because they were trying to do everything by the book.

21:54Zing Tsjeng:Yeah, so they could say they're the good corporate citizen here. They were trying to jump through the right regulatory hoops. But while they were working to become legal at all, they were also trying to raise money. They got big support from a venture capital firm called NIO. Now, NIO was founded by an early Facebook investor called Ali Partovi. And NIO led their seed funding. That's some of the original capital you get in. And that brought some validation that somebody like that was prepared to back them. The market, you know, sits up and pays attention. Well, if this guy's backing them, maybe there's something to it.

22:25Zing Tsjeng:More traditional Wall Street investors like Sequoia Capital, they crop up in a lot of our stories. They were waiting to see that crucial thing about what happens with the CFTC, the Commodities and Futures Trading Commission.

22:37Simon Jack:And then in November 2020, after two years of back and forth, Luana finally got a call from the chairman of the CFTC, who'd been appointed by President Donald Trump the previous year. And the chairman said, you now stand with markets that have been around since the 1840s. I have no doubt that in time you'll grow to be a powerhouse too. And so for the first time ever in its history, the CFTC had given its approval to two 24-year-olds. Kaoshi was the first federally regulated events-based trading exchange in United States history.

23:09Zing Tsjeng:And this is a big moment. And now it was time with that in their back pocket to raise some serious money. Within weeks, they announced they'd raised$30 million in a Series A funding led by venture capital giant Sequoia we just discussed. So Luana Lopez Lara is a millionaire at the start of 2021, aged just 24.

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25:44Zing Tsjeng:Are you really buying a car online on AutoTrader right now? Really? I can get super specific with dealer listings and see cars based on my budget. You can really have it delivered. Or pick it up. Mommy, look! I think your kid is walking up the slide. Really? AutoTrader. Buy your car online. Really?

26:05Simon Jack:Well, let's take this 24-year-old from a million to a billion. So this was, if you're keeping track of the timelines, this was only five years ago. So this is going to be one of our fastest journeys from millionaire to billionaire. And Kaoshi is now legal and it's got funding. But the real question is, are people actually going to use it? So it's July 2021. It's time to open it up to the public. And at this stage, it was just a website. A smartphone app was still to come and initial activity was, you know, modest.

26:32Zing Tsjeng:Well, you know, it takes a bit of getting your head around. But eventually more and more contracts started to roll in and some officials at the CFTC became a bit concerned. And according to Bloomberg, the division, CFTC, demoralised and overrun, kind of accepted defeat and stopped fighting back, some of the people say. By the end of 2021, three senior officials had left the agency, including the head of the division and the head of the product review team. Interestingly, a former member of the CFTC joined Kaoshi's board not long after leaving. Gamekeeper turned poacher.

27:05Simon Jack:Talk about a revolving door. Well, soon Kaoshi had dozens of events contracts on their website. Things that people could essentially bet on on issues like, will there be negative GDP growth by Q4? Will NASA land a person on the moon before 2025? Who will win the Oscar for Best Actor? I mean, I recently was following the Met Gala and people were betting on what designer, a rapper called A$AP Rocky was going to wear. I mean, it's that tiny, minute detail. That's the kind of stuff that people are betting on.

27:34Zing Tsjeng:And, you know, somebody knows the answer to that.

27:36Simon Jack:Exactly. It's not very hard to figure out.

27:38Zing Tsjeng:At the end of 2021, they launched markets on the outcomes of US Supreme Court cases. Real moral hazard in this one, I think. A hugely popular bet was whether the Federal Reserve Chair, Jerome Powell, Jay Powell, would be replaced by the then President Joe Biden. It got over nearly quarter of a million contracts. At this point, wages were capped at$25 ,000, but Luana had the ambition to push that limit much higher. Six months after launching to the public, they had processed$10 million worth of trades. So it's beginning to get some momentum.

28:09Simon Jack:And the world was taking notice. Forbes put Luana, still 25 years old, on their 30 under 30 list for 2022. And at this stage, Tarek was acting as more of Kelshi's public face. It's his picture, for instance, in the Forbes article. All of this makes it quite hard to get a sense of Luana and how she's feeling at this point. I mean, if you look at her Instagram profile, she's this kind of very blonde, statuesque. I mean, you can tell she used to be a ballerina. She holds herself really upright. All activity from before 2024 on her X account, her Twitter account, is missing. So she's quite a private person.

28:44Zing Tsjeng:Right. OK. We know, however, that the company itself was growing fast. That year they had an office in New York. They had a staff of 32. In one of our Instagram posts of their first office, there's a sign that simply reads, make money at Kalshi. And they were, by this point, trading 2 million contracts a week.

29:00Simon Jack:And over the next couple of years, Kalshi slowly grew its user base. in 2023. They're the first individual user cross a million dollars in yearly income on Kaushy. So they were making a million just from these bets, basically. Trades. Trades, event contracts. And on the horizon, there was something very important about to happen, the Trump versus Harris presidential election. And Kaushy, of course, knew they were ready to capitalise on this big event.

29:28Zing Tsjeng:Yeah, but a little setback for them. In 2023, the CFTC, the police, if you like, for this area, blocked Cauchy's contracts on the election. They said they looked too much like gambling and were not in the public interest. But Luana decided to fight back. And against the advice of her investors, she sued the CFTC on the grounds that the regulator had overreached, overstepped its bounds. And the suit claimed it is undeniable that election outcomes have consequences for everyone. They play a pivotal role in determining our collective future. So they're important, they can be traded.

30:03Simon Jack:Well, jump forward to September 2024, just weeks before the election, and the US district court judge ruled in favour of Kaoshi. So this meant that again, Kaoshi made history by offering the first legal election contracts in the US in over a century. And of course, Kaoshi's users wanted to bet on the election. So Kaoshi surge to the number one spot on Apple's app store.

30:25Zing Tsjeng:Yeah, because people do like to bet on politics. It happens in the UK quite a lot. It's actually perfectly legal, but it's called gambling over here.

30:33Simon Jack:Although, interestingly, Cauchy is not allowed to operate in the UK.

30:36Zing Tsjeng:No, it is not. In fact, I tried to sign up before this thing and said, sorry, illegal in your jurisdiction. That's too bad. I was really wanting to have a go. Anyway, what's interesting is that with so many bets coming in the days before the election, Cauchy was actually strapped for cash But remember that early investor we talked about, Ali Potovic at NIO? He WhatsApps both of them to let them know he was going to wire them. By the way, I'm going to wire you$12 million. That's$5 million from NIO, his company, and$7 million from his own back pocket, from me personally. And in his message, he said, we can figure out the terms later.

31:10Zing Tsjeng:Says no one ever.

31:12Simon Jack:I mean, I feel like I've hit the jackpot if my friend pays for my Uber. I mean, let alone$7 million.

31:18Zing Tsjeng:And in total, users bet$500 million in that election on the candidates. And Kalshi predicted Donald Trump's victory more accurately and faster and before traditional polls. That's really interesting.

31:34Simon Jack:Well, with political betting now on the table, it's time for serious money, even more serious than the figures we've talked about before, to enter the chat. So Luana hadn't sought investment for three years, but over 2025, she held three funding rounds. So you call these like CDE funding rounds. In June, they raised$185 million, led by a crypto venture capital firm called Paradigm. This now placed the company at a$2 billion valuation, making it officially a unicorn.

32:03Zing Tsjeng:Which is basically a startup which is worth over a billion dollars.

32:06Simon Jack:And in October, they raised another$300 million, led by Sequoia Capital and Andresen Horowitz. Ritz. Kaoshi was now worth$5 billion and that is a 150 % increase in just four months.

32:19Zing Tsjeng:And when you've got Sequoia and Andreessen Horowitz behind you, you know, that means that they're considered the smart money in Silicon Valley. These people have made billions about backing winners.

32:31Simon Jack:But actually, that's not just it, because two months after that, in December, they raised a further$1 billion.

32:37Zing Tsjeng:Yeah, that's a very rapid capital raise, I would say unusually rapid, although, you know, we keep setting new records. Nevertheless, clearly, the venture capitalists think that they're onto something, something that could be very big and they are piling money in hand over fist.

32:54Simon Jack:Well, this last funding round valued Kaoshi at 11 billion in total. And by this point, she owned 12 percent of the company, putting her net worth at 1.3 billion. Bing. So age just 29, this made her the world's youngest self-made woman billionaire. actually ousting a previous billionaire we've covered on the show, Lucy Groll, from her very top spot.

33:15Zing Tsjeng:That was a short-lived reign for Lucy, wasn't it, in this crazy world? She can always claw it back, though. I'm sure she could. I'm sure she's not suffering too badly.

33:27Zing Tsjeng:Let us take Luana beyond a billion, because at this point, once you've got that billionaire tag on you, the media really started paying attention. Forbes ran a huge profile on her. Tarek was sort of barely mentioned. He's being shoved slightly to the background. She's become more active on X. She posts funny quips and memes. Her banner image on X is a South Park meme. And her pinned post is a response to a Bloomberg article titled Two Math Nerds Crack Open Legalised Gambling on Wall Street, to which she jokes, I prefer calling myself a math connoisseur, but fine.

34:00Simon Jack:Well, she's got a sense of humour. Yeah, yeah. Oh, she also seems to have a lot more confidence. and it's no surprise because by the end of 2025, Calci was trading over a billion dollars every week. But I think it's still relatively niche and I wonder how many of our listeners have used it or heard of it because, you know, we don't allow it in the UK. I doubt very many people in the UK have seen it.

34:21Zing Tsjeng:I think people have heard of it but probably might not be able to use it in that wherever you're listening or watching this because, like I say, in many countries it is. There's quite a long list of countries where it's illegal But it's piqued the interest of people worldwide for two reasons. One is, you know, it's kind of fun to be able to bet on how much rain is going to fall. And, you know, it's a bit like betting on rain. Sorry, trading on raindrops running down a window pane. You know, who hasn't done that? Or two snails racing or something. Do you know what I mean? It's sort of kind of fun.

34:53Zing Tsjeng:But also I think people thinking, gosh, there's surely there are going to be people who actually know what's going to happen, who will have an unfair information advantage, which usually the police of the trading world are very, very hot on. So it still seems to some, I think, like a bit of an anomaly.

35:11Simon Jack:Well, Luana's next move, I think, was to position the company to try and get it to break the mainstream. And to do this, you know, she's partnered with some household names. So Kaoshi has made a big deal with Google to include their prediction market data into its finance platform. So essentially being able to stand up and say, hey, we're on the same level of the big dogs.

35:32Zing Tsjeng:It's almost like the ticker that runs down on those financial shows like CNN and CNBC.

35:37Simon Jack:And so those news channels are actually going to run real time news tickers displaying Kelshi data along the bottom of their screens. And so in March 2026, they also announced that expanding outside the United States, they launched their first ever international operations in Luana's home country of Brazil. Yeah.

35:54Zing Tsjeng:So obviously she's probably considered a homecoming hero in our home country. So we've tried to explain what Cauchy is. We've understood how big it can be, because basically, as Tarek said in the early days, you know, the universe of what you can trade is kind of small at the moment. It's like share prices or the price of copper or gold. This is everything what Kalshi means in Arabic. This is you can trade everything. And therefore, you know, the addressable market is almost infinite, really, because it means you can pretty much bet on anything. But as we said, you know, there are those grave concerns, as we've seen in this case against the military guy from Fort Bragg who bet on the Maduro being ousted.

36:37Zing Tsjeng:he's being prosecuted because you know somebody knew what was going on and that's why you know those are those concerns continue to hover over this industry exactly i mean it's worth talking

36:47Simon Jack:about some of those concerns in detail because the first one that comes to mind is is kalshi just gambling disguised in finance terms i'm not saying anything and you know we know the negative effect that gambling can have on some people we've covered that story in denise coates's episode She's the founder of Bet365. Arguably, you could say this could be more addictive because, like you say, the market for potential bets is infinite.

37:14Zing Tsjeng:Because everyone's got an opinion about something, haven't they? Now, people might not have an opinion about whether Microsoft stock was going up or down. So wouldn't be trading that. Not everyone's a football fan. But everyone's got an opinion on who should be the next James Bond or who should win the best actor Oscar. So if you're inviting those people into this world of trading, you're increasing the universe of people who will take a punt on something because they think people have, you know, they always think they're right. Everyone thinks they've got the inside information. Now, what Kalshi says that argues that it is highly scrutinized, it's regulated.

37:50Zing Tsjeng:And Tarika said in casinos and gambling houses, the revenue they make is out of customers' losses, out of their pockets. You get these weird incentives in the industry. For us, we just take transaction fees. We're not taking money out of anyone's losses. So our gain is not our users' losses. The losses are between the users, not you against the house, if you see what I mean.

38:11Simon Jack:Right. I mean, if you're on the losing end of a$5 ,000 events trading contract, I think you would struggle to see the difference.

38:20Zing Tsjeng:Yeah, I guess that's right. And we've talked about, you know, traders with in-depth knowledge of an event. Some people know more about stuff than others. Some people are more informed. And Koushi's got an argument for that, too. They say it democratises financial opportunities for the average person, saying, you know, why not, you know, maybe you know as much as everyone else.

38:38Simon Jack:That is an interesting take. I mean, on the other side, on the other hand, you could also argue it just turns politics and real life events into just a game, right? You know, should we really be turning political decisions about who should be the next prime minister or president into tradable assets? Is that the kind of mentality we want to be encouraging in people?

38:57Zing Tsjeng:I suppose the worry is, does the tail begin to wag the dog in the sense that the financial interests of the outcome becomes an agent in determining the outcome? Do you see what I mean? Right. Yeah.

39:12Simon Jack:So because you want to win big on an event contract about Trump becoming president, you end up voting for Trump. Yeah. Because you see that the odds are in your favor.

39:21Zing Tsjeng:Yeah. Or, you know, is this going to happen before a certain certain date, for example? I might ring the person who's got, you know, who makes the decision on when this decision is going to happen and say, I've got a lot of money riding on this. I'll split it with you if you push it out another month or two, for example. You know, I'm not saying this happens, but that, you know, clearly there's potential for that.

39:41Simon Jack:We've already seen rumours about this kind of stuff. So people were speculating that when the White House press secretary, Caroline Levitt, abruptly ended the press conference early, right before the 65 minute mark, that traders on Cauchy had bet thousands of dollars on. And now, important to say, neither the White House nor Cauchy have commented on this.

40:00Zing Tsjeng:But Cauchy argues that when it comes to politics, for example, it actually enhances democratic engagement. Participation can lead to more informed discussion, more informed analyses of election outcomes.

40:11Simon Jack:Yeah, I guess if you've got a few grand riding on the outcome of an election, you will be incentivized to keep up with the news. Yeah, for sure. Well, Kaoshi says on its part that it explicitly bans insider trading and investigates suspicious behavior. And, you know, there are supporters of these prediction markets. People say that they can be a force for good. So better forecast, for instance. Prediction markets are often actually very accurate in the same way they predicted Trump winning the presidency. They attract people with good information. So, you know, that news broke ahead of mainstream outlets during the election.

40:44Simon Jack:Well, let's not forget Kalshi and other prediction markets are going to make some people a lot of money. In fact, Donald Trump Jr. actually joined Kalshi's advisory board in 2025. I see. And it's definitely made our ballerina a lot of money. In May 2026, it was reported that Luana and Tarek had more than doubled their net worth in just six months after yet another$1 billion funding round.

41:08Zing Tsjeng:OK, so it is still growing. They've made a ton of money. It's controversial. It's illegal in some countries, but it seems to be doing fantastically well in the US. So what we need to ask ourselves is the question, is Luana Lopez Lara good, bad or just another billionaire?

41:30Zing Tsjeng:But first, we do this fun bit where we score our billionaires on several categories from zero to 10 on categories wealth, controversy, power and legacy. And we always start because that's the name of the game on this podcast with wealth. What do you reckon?

41:46Simon Jack:Well, Luana, currently worth 2.6 billion. So entry level billionaire compared to some of our bigger fish like Elon Musk.

41:54Zing Tsjeng:But you went from a million five years ago to a billion. And remember, a billion is a thousand million. So this is a very rapid ascent indeed.

42:03Simon Jack:I mean, yeah, it is increasing rapidly. And, you know, a lot of people think Kaoshi and other prediction markets could be worth a lot more.

42:11Zing Tsjeng:We often look about how far they've come. You know, is it a rags to riches story? She came from Brazil, but from a, you know, from a solidly middle class educated family. she went to the best schools she was a high achiever she went to MIT so I'm going to give her just on the sheer speed that she's gone from a million to a billion I'm going to give her higher than I would normally just for the absolute number and I'm going to give her a six because I think it's incredible how quickly this has grown oh I think I'd be inclined to

42:45Simon Jack:agree with a six out of 10. Okay. Because that amount of growth in her bank account, I mean, in how much she's worth. Yeah. That is actually quite exceptional, given the fact that she's only 30 this year. Wow. Okay, six for each of us.

43:01Zing Tsjeng:Controversy. There's quite a lot to choose from here.

43:03Simon Jack:Quite a lot, isn't there? Yeah.

43:04Zing Tsjeng:I mean, you know, we've talked a lot about, you know, the controversy about issues related to prediction markets, the potential for the amount of money riding on an outcome to influence the outcome itself to become a factor.

43:17Simon Jack:You know, the potential for people to get way too involved and develop addiction issues.

43:22Zing Tsjeng:Yeah, yeah. I mean, all of those things relate to the business model rather than to Luana herself. I think there's no suggestion that she's behaved improperly.

43:31Simon Jack:I do think, however, we are at the early beginnings of Kaoshi and other prediction markets. I think it'll take a while for the full ramifications of their existence to become clear.

43:42Zing Tsjeng:I think it's quite early to tell. Nevertheless, I'm going to give this a high score. I'm going to give her an eight.

43:50Simon Jack:Wow. I'm going to give her a seven, actually. OK. Because I think the very existence of prediction markets, I think there's room for them to grow in controversy, even more so.

44:00Zing Tsjeng:OK. So you're giving seven with room to grow. Yeah. OK. I like it. Room to improve, some might say. Room to improve, if that's the way you want to look at it. um power i mean because of her this new thing exists in the world or you know certainly because of her almost unbelievably successful efforts to persuade the authorities that this was a goer and therefore it became a federal kind of all us thing that's pretty amazing so you know without her you could argue that you know maybe this wouldn't exist obviously this poly market as well Her convincing the CFTC that this was not gambling and this was trading, that was a major coup.

44:41Simon Jack:Yeah. And bear in mind, at the time they convinced the CFTC, they were just a couple of 20-something-year-olds.

44:47Zing Tsjeng:And people have been trying for this for decades to try and get this approved. To no success.

44:51Simon Jack:I mean, interestingly, a partner at Cauchy's investor, Andreessen Horowitz, said there are few better trainings for being told no and pushing through anyway than being a professional ballerina. An injury, even a short rest, could mean losing your spot. Luanna learned persistence with grace early on and she's carried that same calm confidence into building Kelshi.

45:11Zing Tsjeng:So we've sort of mentioned this already, but basically, Polymarket was not regulated or approved. And now it is thanks to Kelshi and her efforts. So in a way, that market now exists legally because of her. And who knows how powerful this will become. We've talked about some of the potential repercussions. so on power I think it's you know I think it's quite high I think it's a sort of I'm going to give it a 7

45:37Simon Jack:I think I'm going to maybe do slightly lower than you and do a 6 out of 10 I just feel like yes she made essentially made this whole industry from scratch but would people necessarily recognise her name I don't think they would

45:52Zing Tsjeng:true enough okay yeah you're probably right but we'll stick to our scores and on legacy I think this one as you've already alluded to, it's too soon to tell. I mean, in a way, you've kind of created a monster here, haven't you? I mean, you've created something could become incredibly powerful, influential. And, you know, I don't know, twin this with AI, you know, where do you end up, you know? Everyone's going to be jobless during events. You're having the future of humanity being traded by AI, you know, the whole future of the world is going to become a kind of tradable asset.

46:26Simon Jack:Well, this is interesting. Y Combinator's partner, Michael Siebel, remember him, said, I don't know that we have funded a company that has as much potential impact on the world as this one.

46:35Zing Tsjeng:Yeah. Now, in a good way or a bad way, who knows? He wasn't clear about that.

46:40Simon Jack:Tarek said that he thinks that this will be bigger than crypto.

46:43Zing Tsjeng:Wow. OK. And just, you know, Bitcoin alone is worth two and a bit trillion dollars. So we might need a new category for these guys at some point.

46:53Simon Jack:Yeah. Well, I think Legacy, I'm going to score them pretty highly. Yeah. So I think I'm going to give Luana eight out of 10.

46:59Zing Tsjeng:We'll either look back on this period saying this was one of the most fundamental things to sort of change the way we're informed and events are traded. Or we'll look back on this and say, what were we thinking? Anyway, so the question is, is she good, bad or just another billionaire? That is up to you. What do you think? Email goodbadbillionaire, that's all one word, at bbc.com or drop us a text or WhatsApp at 001917. 686 1176 and tell us what you think.

47:30Simon Jack:And don't forget to include your name as we may read out your message on a future episode.

47:35Zing Tsjeng:Indeed we got an email from Steve from Waymuth in England. The email subject interesting was morality. I just wanted to say we shouldn't be celebrating billionaires. It's morally wrong that 12 people have as much wealth as half the world's population. It's also morally wrong that most billionaires pay less tax proportionately than normal taxpayers. The taxation system should be adjusted so that no one could become a billionaire. You're not the first person to say that, Steve. Thanks very much indeed for your email. And it's something that people get in touch with us and is uppermost in a lot of people's minds all the time.

48:12Zing Tsjeng:So who do we have on the next episode? We have one of our rare sports billionaires. Very few from the world of sport has made it into this category. and for my money, one of the most graceful, beautiful sports people to watch of all time.

48:28Simon Jack:Watching him was actually described by one author as akin to having a religious experience.

48:33Zing Tsjeng:It is the Swiss iceberg that is not always an iceberg, full of tantrums in his youth, that is Roger Federer.

48:41Simon Jack:So if you want to learn more about how Roger became a billionaire, find out in the next episode of Good Bad Billionaire.

48:47Zing Tsjeng:Good Bad Billionaire is a BBC World Service podcast produced by Hannah Hufford, The editor is Paul Smith and it's a BBC Studios production.

48:55Simon Jack:For the BBC World Service, the senior commissioning producer is Sarah Green and the commissioning editor is John Manel.

49:05Zing Tsjeng:Hi, it's Simon here. If you love Good, Bad, Billionaire and want more insight into the world of business, where I spend most of my time, then you should check out Business Daily from the BBC World Service, which now has a fresh look. Every day, the podcast takes you into the heart of how corporate money and power shapes our lives. You'll hear what the companies and the people running them are really saying and doing. It looks at all things to do with work and money, from where the influencers are taking over public spaces to where the money from World Cup tickets really goes. It's colourful, revealing, and it explains a lot you may not already know.

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