Kalshi CEO on Super Bowl Wins & NYC Housing Affordability 2/10/26

Summary

Squawk Pod Podcast Summary

Episode: Kalshi CEO on Super Bowl Wins & NYC Housing Affordability
Date: February 10, 2026
Hosts: Becky Quick, Andrew Ross Sorkin
Key Guests: Tarek Mansour (Kalshi CEO & Co-founder), Scott Rechler (RXR Chairman and CEO)

Overview

This episode explores two of the hottest intersections of money, society, and regulation:

1. A deep dive into prediction markets, as Kalshi’s CEO discusses the platform's record-breaking Super Bowl activity, what makes prediction markets tick compared to classic sportsbooks, and regulatory/ethical challenges around insider information.
2. The state of NYC housing affordability and policy, with RXR’s Scott Rechler unpacking New York’s office and housing boom, affordable home supply challenges, and the practical impact of new city politics.

The hosts foster lively debate on tech investment trends, institutional housing buyers, and the nuances of prediction market regulation—all set against active financial, political, and cultural backdrops.

---

Key Discussion Points & Insights

1. Big Tech’s Massive AI Spending and Economic Impact

[02:33-04:48]

• Alphabet’s Bond Issuance & AI Growth:

  • Alphabet raises $20B, including a 100-year bond, to finance AI infrastructure and data centers.
  • "Last week, Alphabet said that capital expenditures this year could reach up to $185 billion." — Andrew Ross Sorkin [03:08]

• Capital Expenditure Discussion:

  • Tech giants are transitioning from capital-light to capital-intensive models, mainly due to ongoing chip and data center investments.
  • "They’re not going back to being completely capital light businesses." — Becky Quick [04:43]

• Tariff Exemptions and Onshoring Chips:

  • Discussion about U.S. efforts to onshore chip production and interplay with Taiwanese suppliers.
  • Regulatory efforts to cap the broader impact on U.S. utility resources and water supplies.

2. Trump Administration Housing Policy & Congressional Pushback

[05:38-09:37]

• Efforts to Limit Institutional Home Buyers:

  • Bipartisan resistance on Capitol Hill to Trump’s attempt to restrict Wall Street purchases of single-family homes.
  • "That reflects some differing ideas among those in Washington on how to get those housing costs under control." — Andrew Ross Sorkin [07:41]

• Power of Lobbying:

  • Real estate and private equity lobbies are actively protecting institutional participation in housing markets.

• Climate Policy Swings & Energy Market Uncertainty:

  • News of potential U.S. EPA rule repeals, possibly destabilizing long-term investment and innovation.
  • "It’s impossible to set up long term plans that cost a lot of money...if things swing every four years." — Becky Quick [09:37]

3. Housing Affordability – Supply Crisis & Institutional Players

Guest: Scott Rechler, RXR Chairman & CEO
[13:10-20:16]

• Supply, Not Institutions, is the Core Issue:

  • "I think the real issue is supply...the only way you’re going to create more affordability...is creating more homes." — Scott Rechler [13:51]
  • U.S. faces a 4-7 million home supply gap.

• Capital Availability (Interest Rates & Regional Banks):

  • High interest rates and weakened regional banks freeze out local builders that can address supply.
  • "The regional builders are somewhat paralyzed." — Scott Rechler [14:23]
  • Lowering the cost of capital—including targeted federal infrastructure or building banks—could expand affordable housing stock.

• Role of Institutional Home Buyers:

  • Acknowledgment that institutional home buying was temporarily positive after the financial crisis, now more marginalized.
  • "It may have been a good thing coming out of the financial crisis...But now, it’s not a good thing from a macroeconomic standpoint." — Scott Rechler [16:23]

• Potential Policy Levers:

  • Ideas like making low-rate mortgages portable, revising step-up in basis tax rules for retirees selling rentals, and facilitating targeted lending for affordable builders.
  • "You can create targeted capital...that will then free up home builders that used to go to regional banks." — Scott Rechler [17:37]

• Regional Banks' Decline:

  • "These are the local homebuilders that understand their market...They’re frozen out of that market right now." — Scott Rechler [20:36]

4. New York City Real Estate, Politics, and Lux Housing Market

[20:54-25:45]

• NYC Market Boom Despite Political Fears:

  • Strongest office market since 2019; luxury and rental housing in high demand.
  • "Companies are growing, taking space...luxury housing...we have had 30% higher levels of sales...The facts are saying people and companies believe in New York." — Scott Rechler [22:13–22:55]

• Mayoral Policy Execution (Homelessness, Snow, Public Services):

  • Change in policy for homeless encampment clearances led to public disturbances and slower city response.
  • "There was an ideological policy change...We called the NYPD. They can’t do anything." — Scott Rechler [24:16]
  • "Garbage is piling up." — Scott Rechler [25:19]
  • Emphasizes that New York’s continued prosperity relies on execution, not inevitability.

5. Interview: Kalshi CEO Tarek Mansour on Prediction Markets & Super Bowl Frenzy

[27:48-43:07]

• Super Bowl Platform Surge & Market Role:

  • "Kalshi was the biggest brand of the Super Bowl this year without running a Super Bowl ad." — Tarek Mansour [28:30]
  • Over $1B in trading volume on Super Bowl Sunday—a 2700% year-over-year increase.
  • App soared to top-three download spot during the event.

• Prediction Markets vs. Sportsbooks:

  • "Underneath it all, it’s not the same thing at all...there’s no house." — Tarek Mansour [29:27]
  • Kalshi profits when customers profit, not the reverse—a major distinction from traditional betting houses.

• Scope and Weirdness of Tradeable Events:

  • Trades extended beyond game outcomes, to cultural moments (“Which song would Bad Bunny perform first?”).
  • Over $100M traded in such “culture markets.” [29:27–30:34]

• Regulatory Environment & Insider Trading Concerns:

  • Federally regulated by the CFTC, with mechanisms akin to NASDAQ/NYSE for KYC, monitoring, and enforcement.
  • "We know exactly who they are...if there was insider trading, the punishment goes from fines to referral to the CFTC for criminal prosecution." — Tarek Mansour [32:44]

• Ethical Debate Around Insiders Influencing Outcomes:

  • Spirited discussion on where to draw lines if event participants or their associates place trades on outcomes they can affect.
  • "The insider trading risk is very real for a stock market as well, and has been real since the stock market has begun." — Tarek Mansour [32:31]
  • "It just doesn’t seem like a fair market trade...there’s an advantage to people who have this information." — Becky Quick [37:30]

• Clarification from Kalshi:

  • Company supports clear rules, working with regulators and supporting the ban on insider trading for prediction markets.
  • "We as a company...want to work with policymakers and regulators to get that right." — Tarek Mansour [38:24]

• Market Efficiency, Hedging & New Partnerships:

  • Kalshi partners with Game Point for sports bonus insurance, enabling teams to hedge financial risk from wins.
  • "The beautiful part of markets—you need hedgers and you need speculators, and when they come together, it brings a liquid, efficient, transparent marketplace." — Tarek Mansour [42:01]
  • Discussion of using prediction markets as a tool for financial risk hedging, not just speculation.

---

Notable Quotes & Memorable Moments

• On AI Investment:
  "If they think they’re building data centers in space, the spending is not stopping anytime soon." — Andrew Ross Sorkin [04:43]

• On NYC Resilience:
  "The facts are saying people and companies believe in New York and aren’t afraid." — Scott Rechler [22:55]

• On Prediction Markets’ Attraction:
  "Our incentive as a company—we win when the customers win. We don’t win when the customers lose." — Tarek Mansour [29:27]

• On Regulatory Philosophy:
  "If there is insider trading...people lose trust in the system...and that’s a bad thing." — Tarek Mansour [40:03]

---

Key Timestamps

• 02:33 — Tech giant AI spending and bond issuance
• 05:38 — Debate on limiting institutional single-family home buying
• 13:10-20:16 — Scott Rechler on housing supply, policy, and capital markets
• 20:54-25:45 — NYC real estate & mayoral policy effects
• 27:48-43:07 — Kalshi CEO Tarek Mansour: Super Bowl, prediction market model, regulatory hurdles

---

Tone & Language

• Conversational, at times playful—yet robust in exploring economic nuance and regulatory complexity.
• Becky Quick: Blunt and challenging, especially on ethical issues.
• Andrew Ross Sorkin: Analytical, provocative, focused on big-picture impacts.
• Tarek Mansour & Scott Rechler: Informative, forthright, incentivizing open discussion of new ideas.

---

Summary Takeaway

This episode captures the pulse of evolving U.S. financial markets, as technology transforms both risk and opportunity. Listeners get a candid look at how platforms like Kalshi can redraw the boundaries of what “markets” mean—and provoke much-needed policy conversations—while urgent issues like New York’s housing crisis reveal how deeply economic and political cycles intertwine with everyday lives. Whether you care about AI, housing, or the future of speculative markets, the episode is both timely and forward-looking.

Transcript

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[Tarek Mansour]

What.

[Host]

Do the steam engine, electricity and AI have in common? These technologies not only change how we work, they can transform entire economies. I'm Stephanie Huang, host of where the Internet Lives, a podcast from Google and Latitude Studios about the unseen world of data centers. Explore how data centers are unlocking growth in every sector of the economy. From agriculture to medicine to manufacturing, data centers are powering a new era of AI innovation. We listen to where the Internet lives.

[Andrew Ross Sorkin]

Wherever you get your podcasts, bring in show music please.

[Host]

This is Squawk Pod and I'm CNBC producer Cameron Costa. On today's episode, one of the biggest winners of the super bowl maybe prediction market Kalshee. Over $1 billion in trading volume on that platform on that Sunday alone. Co founder and CEO Tarek Mansour joins us.

[Tarek Mansour]

Cal State was the biggest brand of the super bowl this year without running a Super bowl ad.

[Host]

But first, New York's best quarter for office leasing in years and luxury housing sales. They're up to RXR's Scott Rechler on Big Apple bets and the new mayoral administration.

[Scott Rechler]

The facts are saying people and companies believe in New York investing in New York and aren't afraid.

[Host]

Plus, President Trump's effort to limit institutional investors buying significant single family homes hits snags on Capitol Hill and tech giants like Alphabet and Amazon are ramping up their AI spend.

[Becky Quick]

You wonder if the spending is going to be quite this high or if this is a high watermark that then.

[Andrew Ross Sorkin]

Comes back down if they think that they're building data centers in space. The spending is not stopping anytime soon.

[Host]

It's Tuesday, February 10th and Squawk Pod begins right now.

[Andrew Ross Sorkin]

Stand Becky by in 3, 2, 1.

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[Becky Quick]

Good morning everybody. Welcome to Squawk Box right here on cnbc. We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Andrew Ross Sorkin. Joe is out today.

[Andrew Ross Sorkin]

Google parent and this is fascinating. Now Alphabet tapping the US debt market to raise $20 billion as it looks to fund its AI ambitions reports say that was up from an expected $15 billion deal. The company reportedly also working on selling sterling and Swiss franc denominated bonds, including a 100 year note in British pounds. The first time a tech company sells a bond with maturity that long, since the late 1990s. Last week, Alphabet said that capital expenditures this year could reach up to $185 billion. And it's just another sort of example of where we are in this sort of unique moment in the economy, the spending amounts and whether we ultimately believe that enough people are going to want to pay for all this.

[Becky Quick]

Yeah. And it does go back to the question of what these companies are. Massive growth without having a whole lot of capex that they had to do up to this point. We've talked about that for about a year or so. Definitely has changed what they're doing. I mean, this company, that free cash flow of $73 billion. So it's a company that kicks off a lot of cash, but not as much as they're talking about in terms of this investment.

[Andrew Ross Sorkin]

And I think the longer term question that I wonder about is it doesn't just seem like this is initial upfront spending, meaning there's clearly obviously the big spending to get some of these data centers up and running. But this now goes back to the chip piece. If you have to keep buying new chips, if you have to keep upgrading these centers, all of a sudden these are not capitalized businesses at all and they never become capital light again.

[Becky Quick]

Yeah, a lot of questions as to what that means. I wonder about that. Like in the case of Amazon, they're definitely ramping up their spending. Amazon has gone through cycles over the course of its entire history where it ramps up to do things like build all of the shipping and fulfillment centers. And then, you know, it's able to kind of calm back down and say, okay, now we're going to milk the profits on this. And Jassy himself said that this is a once in a generation opportunity to capture some of these. So you wonder if the spending is going to be quite this high or if this is a high watermark that then comes back down. But you're right, they're not going back to being completely capital light businesses.

[Andrew Ross Sorkin]

If they think that they're building data centers in space. The spending is not stopping anytime soon.

[Becky Quick]

That is true. US tech giants in the meantime could be in line to get tariff exemptions on imported chips that they are using to build those next generation data centers. The Financial Times says that the Commerce Department is planning to waive some of the taxes for the so called hyperscalers on chips that they buy from Taiwan Semiconductor. Under the plan, the FT says that Taiwan Semi would be allowed to pass out exemptions for its US customers for forthcoming tariffs, depending on how much money the Taiwanese chip giant invests in the United States. The Trump administration is looking to onshore chip production and has threatened new tariffs to reach its goals. But in a weekend interview, Taiwan's top tariff negotiator said that Washington's proposal to move 40% of the island's chip supply chain to the United States is, in her words, impossible.

[Andrew Ross Sorkin]

Meanwhile, the Trump administration reportedly wants tech giants to publicly commit that the data centers that they're building won't raise Americans electricity prices, restrain water supplies and that the companies will pay for the cost of construction. A political report now saying that an agreement between the White House and AI giants would be voluntary. It is unclear which companies could be involved and it's also unclear, at least to me, how these tech companies could effectively pledge that electricity company electric bills won't go up because in so many parts of the country they are not going to be fundamentally responsible for that. So unless they're going to be subsidizing.

[Becky Quick]

Unless there, unless there's a situation where some regulator comes in and says, hey, if this goes up, it's back on you. I don't care what contracts you've signed at this point. Probably state regulators have some power over those things, but we'll see.

[Andrew Ross Sorkin]

But this would be a voluntary pledge. The White House. So it's not even a state by state. But I don't understand.

[Becky Quick]

That's a pretty, that's a pretty smart thing. The White House has come out and said that they are not in favor of these issues and they're really mad about it. So basically the White House is saying we're going to overrule your contracts. It sounds like that's the case. Right.

[Andrew Ross Sorkin]

I don't, I don't know how they would overrule the contracts because ultimately, I mean there's, there's two types of contracts. There's the ones we've talked about which are to me the ones that are the most problematic. Those are the ones which require effectively they get 99 points prioritization uptime. Yeah, but that doesn't, that doesn't specifically get at the issue of the cost of electricity. You're not going to change the idea that somehow you could change the cost of electricity, meaning that some of these guys could control it potentially through subsidization. And that's the only way I think it works. I'm not sure that that's what they are necessarily saying in this. And then there's the, like they're saying.

[Becky Quick]

Please leave us alone.

[Andrew Ross Sorkin]

Well, and then there's these other folks who are building their own electric plants, you know, that are building their own electric plants for their, for their data centers, but those are not even, in some cases, even attached to the grid.

[Becky Quick]

But it doesn't matter if that would be, if that would keep them from sucking energy from the grid. I guess it would keep them from.

[Andrew Ross Sorkin]

It would keep them from sucking electricity from the grid. But, you know, by the way, everything's fungible. So all of this is increasing the cost. Just, it's sort of hard to believe it's not. Meantime, President Trump's campaign to prevent big Wall street investors from buying up single family homes hitting opposition in Congress. Wall Street Journal reporting that both House and Senate lawmakers have resisted putting the idea in bills making their way through the respective chambers. That reflects some differing ideas among those in Washington on how to get those housing costs under control. The Journal saying that the amendment, any kind of amendment like the one the President has suggested, risks derailing progress on the congressional housing bills. Now, the House passed a version yesterday by a vote of 390 to 9 and will now look to reconcile its bill with the Senate. Also, it's worth pointing out a major lobbying effort going on in Washington by some of the big real estate and private equity companies as we speak, and that to say they have power, they have power. We've talked about the carried interest issue for a long time. Trump administration preparing for a big change in US Climate policy. The Wall Street Journal now reporting that the administration is getting ready to repeal the government's scientific finding from 2009 that six greenhouse gases are a threat to public health in the United States. That ruling paving the way for stricter vehicle fuel economy standards under the Clean Air act, that's what allowed that to happen. The Journal saying that power plant emissions will still be regulated, but this latest move could be a precursor to those rules also being weakened as well. So a big move potentially by the administration could open up all sorts of more opportunity to create energy. But for those who have concerns about climate change or also just where money is going to be routed in terms of which energy sources are going to be used, here's where we are.

[Becky Quick]

Yeah. And I think the biggest issue with this is to have wild swings every four years depending on who's in the White House. It's impossible to set up long term plans that cost a lot of money and a lot of capex to go into it.

[Andrew Ross Sorkin]

Look under those situations, my view is we need more energy.

[Tarek Mansour]

Yeah.

[Andrew Ross Sorkin]

To power all the stuff sources. But I think the view, my view is all sources, all in everything.

[Becky Quick]

Yeah.

[Andrew Ross Sorkin]

That means whether you want to get it from fossil fuels, great. But if you want to get it from wind or solar, I think you've got to get it from all these places.

[Becky Quick]

I think the big question though is what the government should be expected to fund. And like in the past, a lot of these things have made sense because the government was heavily subsidizing them. Even Tesla, the reason that it was able to take off was heavy government subsidization. The and when you have swings in what the government will or won't subsidize, that also sets huge changes in place. Like we saw who was it this week that just had the huge write off? Oh, Stellantis. Right. Because of the EV things that they were adopting so much more quickly. GM had to write off some of those things earlier too. Just big, big swings and big changes and things that really take a long time for these companies to develop and a lot of money to put into follow.

[Andrew Ross Sorkin]

Teas will be next.

[Host]

Coming up on Squawk Pod. More on the Trump administration's push to limit institutional investors from buying up single family housing with chairman and CEO of RXR Scott Rechler may have been a.

[Scott Rechler]

Good thing coming out of the financial crisis when we had excess homes that were built that needed to be absorbed and then money invested and put back in the market. I do think the nuance of where developers are building and then renting homes to people that they could ultimately buy and is a good concept.

[Host]

Plus the NYC politics at play in affordable housing and elsewhere right after this break.

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[Scott Rechler]

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[Host]

Welcome back to Squawk POD with Becky Quick and Andrew Ross Orkin.

[Andrew Ross Sorkin]

Here's Andrew joining us on set with a look at real estate, New York City politics and so much more. Scott Reckless, the chairman and CEO of RXR, is also a director of the board of the New York Fed. And there's a whole lot to get to. I want to get to the politics in New York and everything else, but let's just start on the housing issue because everyone's talking about affordability. Affordability, affordability. President's been quite public about his ideas that, you know, he doesn't say it, but folks like Blackstone and other big firms shouldn't be buying up, you know, single family homes. And there's now a whole debate and fight happening in Washington. Tell us what you know about what's happening behind the scenes on the fight and what you think the right answer is.

[Scott Rechler]

Yeah, I think the concept of not having institutions buy homes is sort of a marginal impact right now. I think the real issue is supply. Right. If you, whoever you talk to, there's a supply gap somewhere between 4, 4 to 7 million homes in this country. So the only way you're going to create more affordability, more availability, is creating more homes. And one of the biggest challenges is access to cheap capital. Right. So interest rates got to come down. The regional banks that we've spoken about before, you know, are not lending today to the regional builders. So the regional builders are somewhat paralyzed.

[Becky Quick]

Can I just stop you right there? Just in terms of the interest rates? Interest rates are higher than they were, but they are historically nowhere near the highs that we've seen even in my lifetime.

[Scott Rechler]

Yeah. So, so, so it's interesting and to.

[Becky Quick]

Have A system that only works if interest rates are basically.

[Scott Rechler]

But we're in this really weird spot right now, right, because you really have this bifurcated economy. Look, where's the growth that's driving this macro economy? It's the digital economy that was like 90% of the growth, not including the wealth effect. You then go and look at the real economy, the people that are trying to buy their first home. The people have to live on credit cards, small businesses, they're suffering, right? That's, you know, it's probably.

[Becky Quick]

Since when does the Fed lowering interest rates fix all of the problems?

[Scott Rechler]

I'm not saying this is the Fed lowering, I'm saying lower interest rates. Right? So if you had lower, but you.

[Becky Quick]

Had this usually brings a. It's not a Fed that's just doing that, then it's an economy that stinks.

[Scott Rechler]

Well, or you have an economy that right now is being driven by a very concentrated part of the economy, the digital economy. And the real economy isn't driving at that same pace. Right. So you have this two speed economy and that's, you know, the K shape economy. It's more complex.

[Andrew Ross Sorkin]

We just got to be go back though to this Trump idea for just a second. I hear you. This idea that you're saying it's on the margins, but part of what the President's trying to get at is the issue of supply, right? And you're saying, well, this doesn't really affect supply. It doesn't affect the physical supply, it affects the competition for that supply. And so by default, you could argue, actually it creates supply. Supply in its own way. Because you, you, the homeowner, the citizen of America are no longer competing to buy that asset from, from somebody else that some bigger institution that might actually, by the way, also have different economics behind what they're able to do, the biggest being that they can depreciate the property and you can't.

[Scott Rechler]

Right.

[Andrew Ross Sorkin]

And so the question is whether that is a good or from a public policy question in this country, whether it is a good or bad thing to have these big firms buying up these properties or not.

[Scott Rechler]

My personal assessment would be it's not a good thing from a, from the macroeconomic standpoint. I think the President's right on that. I think it may have been a good thing coming out of the financial crisis when we had excess homes that were built that needed to be absorbed and then money invested and put back in the market. I do think the nuance of where developers are building and then renting homes to people that they could ultimately buy is a good concept that will actually help facilitate new supply, new home ownership. So I think there's nuances to it. So I think there is something to it, but it's not what. The reason I say it's marginal is they're not really doing a lot of that right now. Most of them are focused on build to rent versus buying inventory that people would be competing to.

[Andrew Ross Sorkin]

Right. So it seems to me we have two issues. One is how do we actually just physically grow the supply? That's a long term problem that will take multiple years to solve and maybe a decade or two to solve in terms just the physical nature of creating the supply. So then the question is, while that's happening, if you think you can walk and chew gum at the same time, what are the policy choices we can make that effectively frees up supply or makes whatever supply is available more available than it would otherwise be? From that perspective, what are the things that you would do to effectuate that?

[Scott Rechler]

So again, I'm going to go back to capital, right? If you can create lower cost capital that will create supply. And by the way, you can do targeted capital like they've done this with infrastructure, where they create infrastructure, banks. So you can create targeted capital for home builders that are building homes that have a price point that people can afford to buy 400, $500,000 in certain markets that will then free up home builders that used to go to regional banks that don't have that access to capital or appropriately price capitalized.

[Andrew Ross Sorkin]

So but you think it's a construction story, it's not trying to free up. So for example, I sometimes think about, you heard Scott Bess and in fact, you got it. People gave him a hard time for it. He said that there's retirees who own, you know, five or six properties. There are retirees who own five or six properties. There's not, not most Americans, but there are. And there's always been a question to me about whether we should change the tax policy. A lot of those people are holding onto theirs, onto those homes because they've taken the depreciation off of the rent that they, you know, the rental that they've had for sometimes 25 years and then feel stuck that they can't actually sell the property and they would much prefer to pass it on to their heirs. Right. So that then they get it stepped up.

[Scott Rechler]

So you're saying so step up the basis. So they.

[Andrew Ross Sorkin]

I would, I would potentially step up the basis or get rid of the tax. Or get rid of the tax you know, for a three to five year window, let's say.

[Scott Rechler]

And then there are policies like for.

[Andrew Ross Sorkin]

People over 70 years old, I would, I would literally set it so that people at a certain age so that those properties can get into the market. Even, even if you think it's a windfall in the moment to some of those wealthier retirees.

[Scott Rechler]

Fair policy. Another one like that is that the number of people around the country locked in low mortgage rates.

[Andrew Ross Sorkin]

Right.

[Scott Rechler]

And they can't move, so they don't sell their home.

[Andrew Ross Sorkin]

Make it portable.

[Scott Rechler]

Right. And so.

[Fidelity Ad Voice]

Right.

[Scott Rechler]

Make it portable so they can actually move. That about.

[Becky Quick]

Make it portable. But how, I mean, I know that that used to be be a case when, you know, interest rates were 18% back in the 80s. That was a big deal if you had a mortgage that you could bring with you. But to make that retroactive, you're changing the terms of the deal. I've also heard people say, look, you should be able to allow someone else to assume your loan. But that's kind of crazy if you're a bank that has lending standards to.

[Scott Rechler]

Say that anybody who walks this is not a simple fix. I'm not disagreeing.

[Becky Quick]

I understand with making those from this point on saying let's try, let's get you caught up for something that, that you can take with you. But I would assume that that's a different risk perspective for the mortgage lender.

[Tarek Mansour]

Yeah.

[Scott Rechler]

And so. And the government's going to have to backstop it because that's not going to. The market gets.

[Becky Quick]

Taxpayers are going to have to backstop to say that if we no longer.

[Scott Rechler]

Pay, we have an affordability crisis, particularly on housing. Right. And this is, you know, I mean, we've lent $4 billion to housing this past year. We're going to do $10 billion next year. It needs capital because the regional banks aren't there today to provide that capital.

[Becky Quick]

What happened to the regional banks?

[Scott Rechler]

You know, as we've spoken before, you know, coming out of the savings and loan crisis. I'm sorry, coming out of the.

[Becky Quick]

Fewer of them, they've gotten more.

[Scott Rechler]

Yeah, they get, they, they can't afford to compete with the big banks. They can't afford to make sure they ensure the deposits the way they are. And so they don't have the capacity to be able to be lenders.

[Becky Quick]

But you think that's a huge problem in the housing affordability?

[Scott Rechler]

I think it is. Because if you think about the top 20 bank home builders, they don't need regional banks. Right. They got their own balance Sheet. They're very margin focused. The laid out. When you go to the beyond that, these are the local homebuilders that understand their market, that play on thinner margins, that can build where there's actually real demand. They're frozen out of that market right now. They don't have capacity.

[Andrew Ross Sorkin]

Right. Okay. I want to talk New York City politics for a moment. I want to talk taxes, and then I want to talk weather. We'll talk about the weather in a second. On the tax front, I interviewed Mayor Mamdani maybe two weeks ago now, and he is, you know, committed, as you know, to raising taxes on the wealthy. He's also committed to the corporate tax. Raising the corporate tax.

[Fidelity Ad Voice]

We're talking about corporations that are making an immense amount of profit. And what this is about is redirecting to ensure that that profit is also something that helps the city remain strong, that helps the city also get back on a firm financial footing. Because right now, what we're seeing is there's an immense amount of money being made in the city, but that prosperity is not reaching enough. New Yorkers lives.

[Andrew Ross Sorkin]

What have you seen in truth, in reality right now? Meaning are there 10 that are not taking rentals because they're saying they need to get out of the city? Are there people leaving? Are there people not coming? Or is nothing happening? And that this is all a threat without teeth?

[Fidelity Ad Voice]

Right.

[Scott Rechler]

So if you remember, right after the primary I was hearing, we were talking about, I said three things. You got to look at. You got to look at drown out the noise and look at the facts on the ground. You got to look at what they're actually doing. Right. In terms of what he's actually doing in terms of policy and what the governor's doing doing. Those are the three things.

[Andrew Ross Sorkin]

Yes.

[Scott Rechler]

On the noise side, what you're seeing is the opposite. Right. We've had the strongest office market that we've had in since 2019. It was one of the top three in the last two decades. So companies are growing, taking space. They're not just committing for this year, they're committing for 28, 30, 32. Ken Griffin just announced that he's buying, you know, the 350Park interest. So people are committing to New York housing. Right. If you look at rental housing, a 1 1/2% vacancy rate, this is where people are coming to live luxury housing. You know, we have had 30% higher levels of sales of luxury housing in Manhattan than we've had before. So the facts are saying people and companies believe in New York investing in New York and aren't afraid.

[Andrew Ross Sorkin]

In other words, he may be making a fool, though, of all of the people who said, look, we're, you know, we're leaving New York in droves. Right? Like, and by the way, there I was interviewing him last week saying, or two weeks ago, saying, are you worried that people are going to leave? And he was going to. He was saying, no, no, no, no, no. But we heard religiously from people for months that, you know, look at California, the people are leaving, look, they're all going to go to Miami and New York. Why has that not happened yet if that's the case?

[Scott Rechler]

Right. So I think that New York is this magnet of people wanting to be here for a lot of reasons why, which we talk about. But as it relates to the mayor, you know, the big thing is ultimately execution. The other point I raised when we were here is my concern about experience. And you brought up the weather. You know, one example of where this lack of experience has been an issue is these homeless encampments. You know, over the last four years in New York, if you had homeless encampments, you call the nypd, they'd come with sanitation, social workers, clear it out. The same day, there was a ideological policy change in Mayor Mamdani's administration that they wanted the Department of Homeland Services to come do this. We've had homeless encampments come up in our buildings, people doing drugs, lighting fires on the street. We called the nypd. They can't do anything. I called the mayor's office. They say there's this new policy that's.

[Becky Quick]

Happened in the last few weeks.

[Scott Rechler]

This happened three weeks ago. I called the mayor's office. It's happening right now. And my point to you on the weather is, why do you think 18 people died? Right. So here was a, I think a well intentioned ideological policy, which is the view if they had homeless services bring them in, they're less likely to maybe end up on back on the street. But the execution of it was very poor because you got to realize that you need to think through how do you do it in the past, how do you phase it in? How do you get that done?

[Becky Quick]

They want Department of Homeland Security doing it.

[Scott Rechler]

The Homeland Service, Homeless Services.

[Becky Quick]

Oh, Department of Homeless Service.

[Andrew Ross Sorkin]

Last piece. Do you give him credit? Do you give him blame? What do you do about not the weather itself, but this whole snow situation? I say it because I think people gave him credit in the day or two about clearing the situation. And then obviously it's been a tough road for the past two weeks. I also accept that the weather has been colder than it's ever been in the city for a very long time. So I don't know if it's whether it's his doing or somebody else's doing or whether he gets a pass on this.

[Scott Rechler]

Yeah, I mean, I would give him a B minus. Right. I think, I think that, you know, like you said, these are really unprecedented conditions, but garbage is piling up. Right. So these things happen. And to your point of why people aren't leaving, you know, New York, success isn't preordained. These things don't happen overnight. And so you need to really be acutely focused on changing dynamics. Right. And that's where this ultimately will play itself out. And, you know, if the streets aren't clean, aren't safe, people are going to worry.

[Andrew Ross Sorkin]

All right, Scott, thank you for coming in. It's a great conversation.

[Host]

Next on Squawk Pod, another lively conversation. Prediction market site Kalshee broke records with big game bets on the super bowl this year. We talk with the company's CEO and co founder, Tarek Mansour, right after this.

[Tarek Mansour]

The reason why people are flocking to prediction markets, especially Kalshi, is that, you know, our incentive as a company, we win when the customers win. We don't win when the customers lose.

[Andrew Ross Sorkin]

Oh, could this vintage store be any cuter?

[Host]

Right?

[Becky Quick]

And the best part, they accept Discover.

[Tarek Mansour]

Except Discover in a little place like this?

[Becky Quick]

I don't think so, Jennifer. Oh, yeah, huh? Discover's accepted where I like to shop. Come on, baby, get with the times. Right. So we shouldn't get the parachute pants. These are making a comeback, I think.

[Andrew Ross Sorkin]

Discover is accepted at 99% of places that take credit cards nationwide.

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[Host]

This is Squawk Pod.

[Andrew Ross Sorkin]

You're watching Squawk Box on cnbc. I'm Andrew Ossorkin along with Becky Quick. Joe is off today. A big weekend for sports betting. The total volume traded on Kalshee on the Super Bowl Sunday was more than 1 billion. A daily record for the platform and an increase of 2700% year over year. But it was not without some glitches as the high traffic caused some deposits to be delayed. Join us right now. An exclusive interview is Kalshi's co founder and CEO Tarek Mansource. Good morning to you. A wild Sunday before we even get into it because I know we got some news this morning. What was Super Bowl Sunday like for you? And what how does it all work from behind the scenes?

[Tarek Mansour]

It was an incredible weekend. And you know, Kashi was the biggest brand of the super bowl this year without running a Super bowl ad. And you know, the way we achieved that is the product. I mean, it really was a situation where everybody was on Kashi this weekend. And if you look at the app store charts, the top three apps on the app store were ways to engage with the Super Bowl. It was Peacock, it was NBC and it was Kalshee. And so you could find on cow shenchy lifestyles, live plays, live trades and live chatter. And so really everything was an all in one place where you could engage with the super bowl this year.

[Andrew Ross Sorkin]

And how do you think about what you're doing relative to all of the sports books? I mean, this is the big debate that's playing out in the country right now in various states and the like in terms of what's happening with the quote unquote prediction market versus sports gambling, if you will. Even though I think a lot of people think underneath it all it's the same thing.

[Tarek Mansour]

Well, underneath it all, it's not the same thing at all. You know, one, prediction markets are much broader. So for example, you know, you quoted that we did over a billion in the Super Bowl. You know, our culture markets were huge this weekend. You know, who's what bunny was going to perform was over $100 million in trading. The second thing is it's a market where people are trading against each other. There's no house. And you know, the reason why people are flocking to prediction markets Especially Kalsi, is that, you know, our incentive as a company, we win when the customers win, we don't win when the customers lose. And that's a huge difference in the model. We're regular at the federal level by the cftc, our federal regulator. And yes, you know, there are some entrenched interests that you know, are feeling some pressure from know this new innovation technology is coming to market and it's an age old story where the entrenched interests come out and say, you know, they want a piece of it and you know, they claim that this is sort of unregulated other things but you know, it is regular at the federal level. We're focused on the right sort of set of measures and it's growing. The American people are loving it and the numbers are showing it.

[Andrew Ross Sorkin]

What are the most unique kind of bets that people were making over the weekend? And by the way, what bets won't you allow?

[Tarek Mansour]

Well, you know, what Bad Bunny was going to perform the first song was it was a huge, huge market, you know, did over $100 million of trading volume. But you know, as a federal, federally regulated marketplace. And this is a great question because there's been a lot of, I would say confusion around our industry because there are, you know, regulated players and there are unregulated players. You know, the regular players are American onshore. The unregulated players are crypto based offshore. And there's a huge distinction because the regulated players, you know, ban certain set of markets like war, tasm, assassination, things that could have reverse incentives. They ban insider trading so you cannot do insider trading on Kalshi and they buy and ban all the usual bad sort of fraud practices and bad trade violations that you would see in offshore markets. And that's a key, key distinction.

[Becky Quick]

Hey Tarek, let me, let me just follow up on that a little bit. I mean, it's such a weird thing to have bets on what Bad Bunny's first song would be or what Brian Armstrong might say, say at the top of the Coinbase conference call. I mean, if you're looking at sports gambling, sports players are not allowed to ever gamble or be involved in these markets because they control the outcome. Just like Brian Armstrong said he noticed on one of the prediction markets that, you know, people wondered how many times he was going to say these certain words and then listed them all off. Bad Bunny by the same level could see what's happening with this and then change his lineup of what he's going to do in the first. How are you making sure. That as a marketplace you are limiting the impact of a person who has control over the bet that you're placing or that you're offering, doesn't manipulate it either for their own gain by being able to place bets or being able to tell their friends and family what would go along with those lines. It's bizarre to me to be able to bet on these things things and have someone who completely controls the outcome and you don't know if they're betting or if their friends and family are betting on it.

[Tarek Mansour]

Well, the insider trading risk is very real for a stock market as well and has been real since the stock market has begun.

[Becky Quick]

I feel like we control that and we can trace it. The SEC can very quickly find out who profits by how much and they shut that down. Do you do the same thing on Kalshi?

[Tarek Mansour]

We do the exact same thing on Kalshi. So as a regulated financial market by the cftc, we have the same rules as the NASDAQ and the NYSE and we have the same mechanism of enforcement. So the example you just made was amazing. I mean, we kyc our customers so we know who the customers are when they onboard to Kalshi, like when you're on board to a brokers. We know their name, their address, their Social Security, oftentimes their id. We know exactly who they are. And then, you know, we detect, we have systems that detect any weird patterns of suspicious trades, just like the NASDAQ does. Then it goes to surveillance. We have an investigation staff that runs an investigation and checks who was behind the trade and what they were doing. And if they were doing something wrong and there was insider trading, the punishment goes from fines to referral to the CFTC for criminal prosecution. So the same exact rules, same exact mechanism. And actually just last week we beefed up our mechanism of surveillance. We just announced our new head of enforcement, Bobby. We hired Brian Nelson, who was the former Undersecretary of Financial Intelligence and create an audit committee that is going to oversee a lot of our measures around insider trading.

[Andrew Ross Sorkin]

So here's a question for you though. This, I'm going to give you a really complicated one. It could be fun though. It's a fun philosophical, but maybe practical question. Okay, so let's say you're a dancer for Bad Bunny and you, you knew what the situation is and then you made a bet. It sounds like that would be considered insider trading, Right?

[Tarek Mansour]

So that's a great question and it is a little bit of philosophical question. What is in information and what is insider information? Right. If you go park in front of a Walmart and count the number of people going in and out to estimate their sales, that's information, it's not insider information. Right. If you're an executive at Walmart and have the numbers beforehand and you trade on that, that is insider information material, non public information. Same exact rules apply to a regulated exchange like Kalsi. Right. So if you did research and you were in SF and you were, you know, running around the stadium to try to get information about what song was going to get played, that's information. It's fair game to trade. If you had access to information that you're not supposed to reveal to the public, material, non public information, you cannot.

[Andrew Ross Sorkin]

But this is not, this is why.

[Becky Quick]

You did the same.

[Andrew Ross Sorkin]

But this is why I wanted to raise, raise the question with you. Because most business executives recognize what they can against what's confidential, what's not confidential, and therefore they keep it within a very close circle. In the context of Bad Bunny, for example, the dancer may know the information.

[Becky Quick]

Trees or whether they're trees at the theater.

[Andrew Ross Sorkin]

All of those people. But what I was going to say is, let's say there's a cameraman who was in this happens to be in the stadium during the rehearsals two hours early. And by the way, they have nothing to, they're not associated personally with the Bad Bunny scenario. That would be, you could argue that would be like somebody at a, at a hotel who sees a rehearsal of a CEO giving a presentation prior. Those guys would have normally probably had to sign NDAs by the company because they would be worried about these issues. But in the context of this, they probably wouldn't. And therefore. So how you think about that.

[Becky Quick]

But just to add another layer to that context, what if it's his manager who knows the lineup and tells his girlfriend who tells her hair salon. You can't go after his manager for sharing public information. That's not, you know, not something that needs to be regulated. You guys are the ones that are making bets.

[Tarek Mansour]

It's either one of two cases. Either this information can be public and that's okay, or it's information that cannot be public beforehand and that's communicated to the staff. Right? The cameraman or the dancer. The reason why you don't know what song is going to be played first, that's not public and not everybody knows beforehand. It's a little bit of a surprise Super Bowl.

[Becky Quick]

Yeah, but, but it, but it's not non material. It's not, it's not material. Information that can't be shared. You're making it that by putting it on this betting platform. But they have no obligation to say we're not going to tell anybody our opening lineup because there might be money made on this other place that's now betting on this, that's not the responsibility is not on them.

[Tarek Mansour]

Well, the question here is basically, you know, either for example, if you're, you know, work at the Fed, you're not allowed, you're clearly not allowed to basically reveal the information beforehand.

[Becky Quick]

But this is not material, this is not information. They can't. This is not crucial to a company that is that you say you've got to release this to everybody at the same time. My lineup, I can tell whoever I want what my lineup's going to be or which story I'm going to do the rest of these things. And you can't come back at me and come after me for that.

[Tarek Mansour]

Well, if that's the position that people are making material information, if that's the position that people are taking, which is essentially, this is non material, it's non material, nonpublic information, it's basically, you know, it's okay to actually talk about which song is going to be played or it's okay to be, you know, to divulge a series of information beforehand, then that it's okay and it's totally fair game. And I agree with you in that case. Right. And if in the just doesn't seem.

[Becky Quick]

Like a fair market trade like that seems like there's an advantage to people who have this information that there's no way you could go after them because this is not material information.

[Tarek Mansour]

This has been an age old question for all types of financial markets. Right. Should the farmers be able to trade on grain futures? You know, because they have more information about the crops questions and you know, we have answers to questions in the.

[Becky Quick]

Commodities, we're going to be able to tell Bad bunny, he can't tell people what his lineup is because some unrelated entity is making bets on this that he has no relationship.

[Tarek Mansour]

Well, but if he can tell and if it's, if he can't tell people what the lineup is and that he wants to divulge that beforehand, that's fair game and that's part of what the risk in the market is basically people are buying into. Right. I think the important thing maybe just to kind of close that, that that line is essentially like, you know, we as a company have always been, you know, we spent four years getting regulated ahead of time, you know, to launch.

[Becky Quick]

This marketplace you're in a better position.

[Tarek Mansour]

But, and as we engage with policymakers and regulators, you know, there is, I think over time work that we're doing. And you know, the CFC chairman just talked about this, about promulgating new sets of rules around these types of markets to make it clear to the general public like, you know, what is kind of fair game, what is not. You know, how do we kind of consider what's inside information and so on. And this is something that Kalshee is very pro. You know, Richard Torres came up with a ban on insider trading a few weeks ago. And we came out pro that, that, that bill. And as a company, we want to work, I mean, I'm here in D.C. we want to work with policymakers and regulators to get that right.

[Andrew Ross Sorkin]

Two related things. You know, Brian Armstrong has made a very interesting point that he actually thinks in terms of signal in the noise that you actually want to have insiders trading. Now that's not necessarily about the trading itself, but about the signal that comes from the trading. To the extent that there's sort of an interesting component part of what you're doing, you're providing a very valuable signal, if you will, to the marketplace about what's happening. That's a different element of, you know, a different way to think about this. But how do you think about that?

[Tarek Mansour]

That's a great question. And you know, and as beauty as a big, as an industry is becoming so big and consumers are adopting it, there's some disagreements within the industry and, and I disagree here. So I think that same line of thinking could apply to the stock market. You could say, well, you should insider trading in the stock market because that would make it more efficient and pricing would be more real time. And that would be true. The problem in practice is if there is insider trading that is happening in the stock market or on prediction markets, people lose trust in the system. And if people lose trust in the system, they stop trading, which means volume dries up and liquidity dries up. And that's a bad thing.

[Andrew Ross Sorkin]

Tarek, you guys are announcing a deal this morning, a new partnership. And I wanted to talk about that a little bit. Can you tell the audience about it?

[Tarek Mansour]

So we're very excited about this announcement. We're announcing a partnership with a company called Game Point gamepoint, which specializes in sports insurance. And so what they do is they sell insurance to sports teams on a variety of different things that sports that usually impacts sports teams. And one key use case that we're starting to work on with Game Point is on the, on compensation, on, you know, competition for coaches and others, where oftentimes when teams win a championship, there's a big bonus package that teams have to pay up. And you usually what they do is they insured through traditional reinsurers, companies like Lloyd's, Munich Re, Swiss Re and others. And that's the beauty of marketplace based mechanism. Now we have a better way to basically hedge and insure those risks, which is cashier because the pricing is better and it's more transparent. And there's going to be a whole kind of series of hedges that we're going to be putting out over the next few weeks.

[Andrew Ross Sorkin]

Can I ask a larger question about hedging? And it's interesting. I know a number of investors who are now using your platform and others to quote, unquote, hedge their bets. Not necessarily in the sports context, but I think actually in the market context, meaning they buy a stock in the stock market and they hedge their risk by making a bet on the other end that is representative of the opposite in some, some way or shape or form. Having said that, if that is the case, do you have any concern that it perverts the signal, if you will, about what the ultimate outcome is going to be? So if somebody is hedging their risk by betting on a political outcome, for example, but they actually are betting against somebody not because they think they're going to lose, but because it's a hedge against something else that they're doing. What that says, therefore, about the signal that we all receive, that's a great question.

[Tarek Mansour]

So the general answer is no. I mean, I think, you know, the beautiful part of markets, you need hedgers and you need speculators, and that's when they come together, it brings a liquid, efficient, transparent marketplace. And so yes, when a hedger comes in and wants to offload some degree of risk and transfer to another party, it could move the price a little bit. But that's why you need the other parties on the other side, because the other party will find price inefficiencies like in the traditional financial markets. And those price inefficiencies means an opportunity for the other party, the speculators, to make money off of that hedge. And that's why the interplay has been so neat in our markets. And our type of markets is like, you know, the farmers are offloading some risk and then the hedge funds or other speculators on the other side come and take that risk. And you know, they provide liquidity to the marketplace. So, you know, overall the market self calibrates. That's why it's so efficient. It just sort of like there's a mechanism to self calibrate as, you know, as people kind of price out the inefficiencies.

[Andrew Ross Sorkin]

Tarek, it is a longer conversation. I know. I'm personally fascinated by prediction markets and what you're all doing, and we appreciate it and hope to see you again very, very soon.

[Tarek Mansour]

Thanks for having me.

[Host]

That's Squawk Pod for today. Thank you for listening as always. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Rossorkin weekday mornings on cnbc starting at 6am Eastern to get the best bits of that three hour TV show right into your ears. Don't forget to follow Squawk Pod wherever you get your podcasts. We'll meet you right back here tomorrow. Have a great day.

[Andrew Ross Sorkin]

We are clear. Thanks, guys.

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[Host]

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[Andrew Ross Sorkin]

Huh.

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That sounds easier than I thought.

[Host]

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[Becky Quick]

Yeah, I do.

[Andrew Ross Sorkin]

Now, where did I put my keys?

[Host]

You will find them where you left them.

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