Prediction markets planted their flag on Main Street. Now they are targeting Wall Street.

Yesterday afternoon, I spoke with Andy Ross, Kalshi’s institutional director, about the platform’s push to attract institutional investors.

The 40-minute conversation covered how Ross is trying to attract bigger players to the platform, the impact it can have on their businesses, and how he handles concerns about prediction markets. I think it’s worth watching, but I’m biased.

In the meantime, these are some of the most important takeaways.

Same platform, new tone: Kalshi isn’t going after Wall Street because he thinks financial firms want to bet on the NFL or the NBA. The value proposition for institutions is to create an easier way to protect themselves.

Helping companies and investors de-risk has been a staple of financial markets forever. But Kalshi’s argument is that traditional coverages are not always straightforward. The customizable nature of contracts means that prediction markets can offer a more direct line to the risk you are trying to protect against.

A new data source: Kalshi’s current relevance to Wall Street is arguably more of a data source than a trading venue. With millions of users weighing in on a wide range of topics, there is a lot of valuable information to digest.

According to Ross, the crowdsourcing approach to marketplaces also produces very accurate data. He cited internal analysis that found some of Kalshi’s markets were right 93% of the time a week before an event.

It’s also a great way to get your foot in Ross’s door.

“I can’t tell you the number of conversations I’ve had that were, ‘Give me the data. Great, sure, wow, that’s amazing. Explain to me how I can trade now tomorrow, please,'” he told me.

Liquidity is key: Kalshi doesn’t take sides in any of its markets, meaning it needs to constantly find buyers and sellers of an outcome. This becomes more difficult as operations become larger and more personalized.

Nowadays, the process can be a bit manual. Ross told me how he personally called a market maker to help a hedge fund set up a trade on the US CPI. But he is confident liquidity will come as Kalshi continues to build all the “piping and plumbing.”

The key benchmark you’re looking at: banks coming onto the platform.

“They do it because their customers want to. There’s a palpable demand around that. That’s what I think is the key activation point that I’m seeing,” he said.

Address criticism: Game. Use of privileged information. A regulatory gray area. These are some of the common criticisms of prediction markets. They’re also things Wall Street typically tries to avoid.

Ross said those questions come up a lot on the street, but his answer is direct.

“If you want to try to manipulate the market and use insider trading in Kalshi, we will find you. We know where you are and you will go to jail,” he said.

(I told Ross he was giving off Liam Neeson’s “Taken” vibes. We’ll see if Kalshi hires Neeson for his next ad campaign.)

Sports: The biggest driver of Kalshi’s business is sports. Meanwhile, Wall Street is pouring money into sports ownership. So as Kalshi looks to grow his institutional base, is there anyone who’s a good fit on the field (or in the owners’ box)?

In a way, sports owners using Kalshi makes a lot of sense. Sports are big business and their media rights are sold at high prices. Having a channel to cover the risk could give owners more flexibility.

Ross said he has not had personal conversations with professional league officials. He also acknowledged that incentives can be complicated.

“You also don’t want to be able to say, right, I’m going to put a hedge on whether I’m going to get relegated, and then you’re going to sell all your players, right? That’s the concern,” Ross said.

WATCH THE FULL INTERVIEW

Are you an executive interested in joining a BI Live Q&A session? Drop me a line at ddefrancesco@businessinsider.com.