Tarek Mansour has a simple pitch for why Kalshi shouldn’t be regulated as gambling. His platform is a peer-to-peer exchange. Customers bet against each other, Kalshi takes fees from both sides, and the house has no stake in the outcome. It’s a financial market, not a casino.
Aaron Brown, a Bloomberg Opinion columnist and former head of financial market research at AQR Capital Management, says that argument has a problem.
It’s the same business model organized crime bookmakers ran for decades before the FBI shut them down.
The Mob Ran A Balanced Book Too
Brown points out that the point spread, invented in the 1940s, let bookmakers attract roughly equal action on both sides of any sporting event.
The outcome was irrelevant to profitability. Bookmakers collected about 10% vigorish from losers, netting roughly 5% of total action no matter what.
By the 1970s it was a national market with …
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