Kalshi ended its relationship with Donald Trump Jr., but it wasn’t just about competition. The prediction market revealed the real reason behind the split as Democrats prepare sweeping investigations.
Kalshi’s explanation for ending Donald Trump Jr’s advisory contract
Kalshi, the nation’s largest prediction market, announced Thursday that Donald Trump Jr. will no longer serve as an adviser, The New York Times reported. The firm said both parties agreed to part ways because his investment firm, 1789, had heavily invested in Polymarket, Kalshi’s biggest competitor. A spokesman for Donald Trump Jr. confirmed that the decision was mutual.
Kalshi said it reached out to Donald Trump Jr. this fall to discuss ending his contract. The move came after 1789 added about $300 million to its Polymarket investments in August, on top of earlier contributions of about $200 million. “Both parties understood that advising two competitors in a growing sector was complicating things,” the company said.
It remains unclear whether the president’s eldest son will keep his Kalshi shares, given as part of his compensation package when hired in January 2025. Those assets are now estimated to be worth millions.
The Trump administration has actively supported prediction markets. After sweeping the midterm elections, Democrats in Congress have promised to investigate allegations of self-dealing by the administration. Some critics have pointed to federal regulatory approvals given to Kalshi as a prime example of conflicts of interest.
The Commodity Futures Trading Commission recently authorized Kalshi to offer trading on stocks and cryptocurrencies without owning them. Those decisions prompted highly unusual lawsuits from major trading clearinghouses. The clearinghouses claimed the CFTC was violating federal laws designed to protect investors and financial markets.
The administration has also challenged red and blue states that claim prediction markets fall under state gambling regulations. The CFTC has backed Kalshi in multiple lawsuits against the states. Donald Trump Jr. echoed the CFTC’s stance in a closed-door meeting with Republican state attorneys general in March. Through his spokesman, the president’s son has previously said he only helped Kalshi market itself.
