Kalshi terminates advisory deal with Donald Trump Jr after rival investment
The prediction market startup ended its contract with Trump Jr following his firm's increased stake in Polymarket, a move that aligns with growing congressional scrutiny.
By Andrew Kovalenko ·
Kalshi, a prediction market startup valued at approximately $40 billion, has concluded its advisory agreement with Donald Trump Jr. The decision comes after Trump Jr's venture capital firm, 1789 Capital, significantly increased its financial position in Polymarket, a direct competitor to Kalshi. A spokesperson for Kalshi confirmed the termination of the contract, noting that the move was mutually agreed upon.
The relationship between the two entities had been active since January 2025, when Trump Jr was appointed as a strategic advisor. At that time, reports indicated he received a stake in the company worth $300,000. His role was primarily focused on marketing efforts aimed at conservative audiences, including the MAGA movement, helping the company expand its customer base.
According to the Kalshi spokesperson, discussions regarding the end of the contract began in August. This timing coincided with the public revelation that 1789 Capital had led Polymarket's most recent funding round. The spokesperson stated that the company was grateful for Trump Jr's contributions and emphasized that the decision was not driven by political considerations.
However, two sources familiar with internal company matters suggested that political factors did play a role. They noted that the recent midterm elections, which resulted in a Democratic sweep of both houses of Congress, could lead to increased oversight of companies with ties to the White House. Democrats have signaled their intent to investigate President Donald Trump's family business connections, raising concerns within Kalshi about potential scrutiny.
A third source indicated that Kalshi had been seeking to broaden its appeal across various demographic and political groups in early 2025. The company specifically engaged Trump Jr to assist in reaching a conservative market segment. The source added that Kalshi reached out to Trump Jr during the fall to address the conflict of interest arising from 1789 Capital's investment in a rival firm.
Neither Polymarket nor 1789 Capital commented on the situation. Donald Trump Jr did not immediately respond to requests for comment. A representative for 1789 Capital also declined to provide further details regarding the investment or the advisory role.
Prediction markets have gained significant attention since the 2024 presidential election, where they diverged sharply from traditional opinion polls by correctly signaling the victory of Donald Trump. At that time, Kalshi highlighted the accuracy of its forecasts while criticizing traditional media and pollsters for missing the outcome.
The industry now faces a more rigorous regulatory environment. Senator Elizabeth Warren has pledged to address insider trading on these platforms. Additionally, Democratic lawmakers Senator Chris Murphy and Representative Greg Casar introduced legislation earlier this year to ban bets on military operations and other sensitive government actions.
Recent reports by Reuters indicate that both Kalshi and Polymarket have made substantial political donations to both major parties this year. As several legislative efforts to regulate prediction markets advance on Capitol Hill, questions about the ethics and legality of well-timed market bets continue to grow.
The termination of Trump Jr's advisory role marks a significant shift in Kalshi's strategy as it navigates the complex intersection of business interests and political scrutiny in the current congressional landscape.
