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Kalshi has ended Donald Trump Jr.’s advisory contract, citing his venture capital firm 1789 Capital’s deepened investment in rival prediction market Polymarket, crypto.news reported on Nov. 12. A Kalshi spokesperson said the two sides mutually agreed to end the role after his firm’s investment in a competitor over the summer. Reuters first reported the exit.
Key facts
- Kalshi said discussions about ending Trump Jr.’s advisory role began in August, when 1789 Capital led Polymarket’s latest financing.
- 1789 Capital committed about $300 million to lead a $1 billion Polymarket round, valuing the company at $21 billion, up from close to $15 billion before the transaction, according to crypto.news and Cointelegraph.
- Trump Jr. joined Kalshi as a strategic adviser in January 2025, before his father returned to the White House, and the Financial Times reported he received a stake then worth $300,000.
- Kalshi’s spokesperson said politics played no role in the decision, while two people familiar with the matter told Reuters some employees had raised concerns about what Democrats’ midterm sweep of both chambers of Congress could mean for the company.
- Reuters did not disclose whether ending the advisory contract changed Trump Jr.’s Kalshi ownership.
A stake in both sides of the prediction market race
The arrangement linked Trump Jr. to two competing platforms: he advised Kalshi while 1789 Capital, where he is a partner, backed Polymarket. His firm had previously committed roughly $200 million to Polymarket, bringing combined commitments to around $500 million with the new contribution, per crypto.news. Polymarket and Trump Jr. did not immediately respond to Reuters’ requests for comment.
Also readCFTC monitors prediction markets for manipulation before midterms
Kalshi credited Trump Jr. with helping bring customers to the platform. When he joined, CEO Tarek Mansour described a role involving market strategy, growth, partnerships and reaching new audiences, and Trump Jr. said his family had used the platform during the 2024 presidential election.
Blockonomi reported that Kalshi contacted Trump Jr. in the fall to discuss the potential conflict, a detail that sits alongside the company’s stated August timeline; Reuters did not report the size of 1789 Capital’s Polymarket stake.
Also readCFTC Reopens Review of Polymarket's 2022 $1.4M Settlement
Regulators and courts are still drawing the lines
The exit lands in an industry where federal registration and state gambling laws are still contested. A July 27 Minnesota court injunction blocked enforcement of the state’s new prediction market statute against CFTC-registered exchanges while lawsuits proceed. U.S. District Judge Katherine Menendez granted preliminary relief to the federal government, the CFTC, Kalshi and Polymarket US, finding the plaintiffs likely to succeed on at least part of their argument that federal law displaced the state statute. The decision covered preliminary relief only, leaving the final merits for later.
Minnesota’s statute was scheduled to take effect Aug. 1 and imposed criminal penalties for operating covered prediction markets and supporting activities. Federal regulators have separately examined contracts tied to public speeches. In a September advisory announcement, the CFTC warned that “mention market” contracts carry heightened manipulation risks because payouts depend on individual conduct that may lack independent verification, citing Core Principle 3 of the Commodity Exchange Act. On Aug. 28, the agency settled charges against former White House teleprompter operator Gabriel Perez, finding he traded mention contracts between December 2025 and February 2026 using advance access to presidential speeches; he was ordered to return $107,539.02 in profits, pay a $65,000 civil penalty and accept a three-year trading ban.
On Capitol Hill, Blockonomi and Cointelegraph reported that Nevada Senator Catherine Cortez Masto challenged the CFTC’s approach to sports-related products and wrote that the Trump family was heavily invested in prediction markets, while California Representative Ro Khanna called for a ban on sports event contracts. Lawmakers have introduced proposals to restrict contracts connected to military operations and other sensitive government actions.
Why it matters
The split removes one of the more visible political ties in prediction markets at a moment when both platforms are fighting state gambling claims and federal oversight questions. It also shows how a venture investment can collide with an advisory seat when two platforms compete for the same users and volume. Kalshi framed the exit as a conflict-of-interest call rather than a political one, but the reporting from Reuters and Blockonomi suggests internal worry about a changed Congress played a part in the timing.
What to watch
Watch the Minnesota litigation as it moves from preliminary relief toward a ruling on the merits, and any follow-through on proposals in Congress to restrict contracts tied to sensitive government actions. Further word from Kalshi or Trump Jr. on his equity stake would clarify what the split actually changed.
Sources: crypto.news, Blockonomi, Cointelegraph
