Key Takeaways
- Donald Trump Jr. is leaving his Kalshi advisory role after his investment firm, 1789 Capital, made a significant investment in rival prediction market Polymarket, where he remains an adviser.
- The departure comes after Democrats won control of Congress in the midterm elections, setting the stage for investigations into the Trump family’s cryptocurrency businesses and financial ties to prediction markets.
- Kalshi and Polymarket face growing regulatory scrutiny as state authorities challenge their sports betting contracts, despite the Trump administration’s more permissive federal approach to prediction markets.
The departure, first reported by Bloomberg, ends an arrangement that had attracted political scrutiny because Trump Jr. simultaneously advised two of the industry’s largest competing platforms.
A Kalshi spokesperson said the decision followed a substantial investment in Polymarket by 1789 Capital, the investment firm where Trump Jr. is a partner.
“We have mutually agreed to end Don’s advisory role after his firm’s significant investment in a competitor this past summer,” the spokesperson told Bloomberg. “We are grateful for his contributions in helping us market Kalshi to more customers.”
Trump Jr. joined Kalshi as a strategic adviser in January 2025, shortly before his father’s second inauguration. Kalshi CEO and co-founder Tarek Mansour initially said Trump Jr. would help guide the company’s expansion, although the platform subsequently characterized his responsibilities as focused on marketing rather than regulatory affairs.
Trump Jr. received equity in Kalshi as compensation for the advisory position, according to Bloomberg. He remains connected to Polymarket through both an advisory role and his firm’s investment.
As previously reported by Bitcoin.com News, 1789 Capital pursued an additional $300 million investment in Polymarket in September, following an earlier $200 million commitment. The latest investment was part of a funding round targeting a $21 billion valuation for Polymarket, while Kalshi hit a $40 billion valuation in late October following its latest $1 billion funding round.
Democrats Plan to Ramp Up Trump Family Scrutiny
The departure comes shortly after Democrats won control of both chambers of Congress in the Nov. 3 midterm elections, creating the prospect of investigations into President Donald Trump’s family businesses and their relationships with federally regulated industries.
Rep. Robert Garcia, the leading Democrat on the House Oversight Committee, identified the Trump family’s business activities as a potential investigative priority.
Sens. Elizabeth Warren and Jeff Merkley have also questioned Trump Jr.’s financial and advisory ties to prediction market platforms, demanding answers from the White House by Nov. 23. Their inquiry follows a Commodity Futures Trading Commission (CFTC) settlement with a former Trump White House teleprompter operator accused of using advance knowledge of presidential speeches to place bets on Kalshi. The individual was ordered to pay $173,539 in penalties and received a three-year trading ban.
Warren is expected to lead the Senate Banking Committee when Democrats take control in January, potentially expanding scrutiny of prediction markets and Trump family businesses. Congressional Democrats have already questioned whether companies linked to Trump could benefit from preferential treatment by federal regulators.
The political controversy comes as prediction markets face mounting legal challenges over their expanding sports contracts. The Trump administration’s CFTC has generally supported federal oversight of prediction markets, while state regulators argue that sports-related contracts constitute gambling subject to their laws.
As Bitcoin.com News reported, the CFTC issued guidance on Nov. 5 directing federally regulated prediction exchanges to eliminate state-specific trading restrictions within 30 days or explain why they could not comply. The directive followed court orders restricting Kalshi’s activities in certain jurisdictions, intensifying a dispute between federal regulators and state gambling authorities.
The regulatory conflict has also drawn attention from Republican lawmakers, complicating what had previously been a largely partisan dispute over prediction markets.
Trump Jr.’s departure removes one of Kalshi’s most visible connections to the president’s family, but his continued involvement with Polymarket leaves those financial and political relationships under scrutiny as Democrats prepare to assume control of Congress in January.
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