Key Takeaways:
- Kalshi terminated its partnership with Donald Trump Jr.’s firm after it made a bet on their competitor, Polymarket.
- The conversations started in August, with 1789 Capital rising in Polymarket’s newest round.
- That’s an outcome that seems to coincide with rising interest by U.S. lawmakers in predicting markets.
Kalshi has terminated its partnership with Donald Trump Jr. after his investment company 1789 Capital invested in rival Polymarket. The shift follows heightened inquiries about political ties and regulation by prediction market sites.
1789 Capital’s Investment Creates a Conflict
A Kalshi spokesperson confirmed to Reuters on November 12 that both sides had agreed to end Trump Jr.’s advisory role after his firm made a significant investment in a rival platform.
Discussions about ending the contract began in August, when 1789 Capital led Polymarket’s latest funding round. In the fall, Kalshi reached out to Trump Jr. about the possible conflict of interest.
The company expressed its gratitude for his contribution to marketing Kalshi and making it customer friendly. And didn’t accept train companies’ political pressure, it added.
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Trump Jr. Held Stakes in Both Companies
In January 2025, Trump Jr. signed on as a strategic adviser to Kalshi with an equity stake. At the time, The Financial Times reported that his shares were worth about $300,000.
At Kalshi, the company was competing with 1789 Capital, which was also becoming more involved with Polymarket. Trump Jr. is a partner at the investment firm, which was a big supporter of Kalshi’s competitor.
Polymarket declined to comment to Reuters. A spokesperson for 1789 Capital declined to comment, and Trump Jr. didn’t immediately respond to a request for comment.
Prediction Markets Face Greater Political Scrutiny
The move coincides with growing interest among US lawmakers in prediction markets. These sites became more widely known in the 2024 presidential race when their predictions eventually became correct as conventional politics appeared to be dodging.
However, their expansion has also raised concerns about insider trading, political influence and the legality of certain event-based contracts.
Some of the Kalshi employees had worries that the firm’s relationship with the president’s son might cause the company to be subjected to congressional probes, Reuters reported. Kalshi said there were no political risks to consider while making the decision.
Read More: JPMorgan Cuts Polymarket Banking Ties Amid Regulatory Concerns and $20B Valuation
US Lawmakers Target Insider Trading
Industry is under fire all around. Senator Elizabeth Warren has asked for an end to insider trading on prediction markets. A bill by Senator Chris Murphy and Representative Greg Casar earlier this year to label betting on military operations and such sensitive government activity as unpatriotic.
In addition, there have been questions about political donations and trades on both Kalshi and Polymarket. A succession of out-of-sync wagers has raised the spectre of some wagers being based on insider knowledge.
Kalshi’s move further deepens a crack in a sector that is increasingly being questioned on its operations and the number of people allowed to trade on it.
The post Kalshi Ends Trump Jr. Advisory Role After 1789 Capital Invests in Rival Polymarket appeared first on CryptoNinjas.
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