Kalshi has ended its advisory relationship with Donald Trump Jr. after his venture capital firm, 1789 Capital, increased its investment in rival prediction market platform Polymarket, a Kalshi spokesperson confirmed.
Trump Jr. joined Kalshi as a strategic adviser in January 2025 and reportedly received an equity stake worth approximately $300,000 at the time. Kalshi originally brought him on board to help attract conservative audiences, including supporters of the MAGA movement. A source familiar with the arrangement said he was compensated in equity for helping the platform connect with that audience.
Dual connections under scrutiny
Reuters reported that the growing connection between 1789 Capital and Polymarket raised concerns inside Kalshi, particularly over a potential conflict of interest. Kalshi reportedly began discussing 1789 Capital’s latest investment in Polymarket after news of the deal surfaced in August, and it reached out to Trump Jr. during the fall to address the situation.
There were other issues as well. With Democrats gaining control of both chambers of Congress following the midterm elections, companies with connections to the Trump administration could face increased scrutiny. Some employees were concerned that having the president’s son on the advisory team could attract unwanted attention from lawmakers.
Kalshi pushed back against that explanation. Its spokesperson said political considerations played no part in ending the arrangement and that the company had neither discussed nor considered the political implications.
Prediction markets face political scrutiny
Prediction markets gained significant attention during the 2024 US presidential election, when their forecasts pointed toward a Trump victory despite differences with traditional opinion polls. Kalshi used that moment to promote the accuracy of its predictions while criticizing pollsters and mainstream media coverage.
The industry could now be entering a more complicated political environment. Both Kalshi and Polymarket have made substantial political donations to candidates from both parties this year, according to campaign finance records. Senator Elizabeth Warren has called for tougher action against insider trading on prediction markets.
The CFTC could take enforcement action against Kalshi over allegations that it failed to notify the regulator before introducing dozens of new contracts. The company has downplayed the matter and called it a procedural issue involving a handful of contracts, some of which were never launched.
