New Delhi, June 14 -- When prediction markets were little more than an idea on Wall Street, Kalshi Inc. co-founder Luana Lopes Lara found inspiration in an unlikely place: the womb of Kylie Jenner.

It was early 2018 and the internet was abuzz with speculation as to whether Jenner, the reality TV star-turned-cosmetics-founder, was with child. Lopes Lara was interning at Five Rings, a New York trading firm, learning the art of making markets. She asked her peers what they thought of the hype - sensing an opportunity to create a novel wager - but none of the other interns had even heard of Jenner.

"I was the only person that was like, 'Oh my god, I think she's pregnant. Look at these things on Instagram,'" Lopes Lara said in an interview f...