Kalshi Ends Trump Jr. Advisory Role After 1789 Capital’s Polymarket Commitment
Kalshi has ended Donald Trump Jr.’s advisory role after his venture capital firm, 1789 Capital, agreed to contribute about $300 million to a planned financing for rival Polymarket.
- Kalshi said discussions about ending the role began in August.
- The proposed Polymarket round targeted $1 billion and valued the company at $21 billion.
- The split comes as prediction markets face regulatory disputes and scrutiny over contracts vulnerable to manipulation.
A conflict between competing platforms
“We have mutually agreed to end Don’s advisory role after his firm’s significant investment in a competitor this past summer, ” a Kalshi spokesperson told Reuters. Kalshi said discussions began in August, when 1789 Capital was involved in Polymarket’s latest financing. The company also thanked Trump Jr. for helping attract customers.
Trump Jr., a partner at 1789 Capital, joined Kalshi as a strategic adviser in January 2025. Kalshi’s original announcement said he would work on market strategy, growth, partnerships and reaching new audiences. He joined Polymarket’s advisory board in August 2025.
Reuters reported his departure on Nov. 12, 2026. Polymarket and Trump Jr. had not immediately responded to Reuters’ requests for comment.
The financing figures refer to a planned round, not confirmed final terms. 1789 Capital agreed to contribute approximately $300 million toward a Polymarket round targeting $1 billion. The proposed financing valued Polymarket at $21 billion, up from a valuation close to $15 billion before the transaction.
1789 Capital had previously invested roughly $200 million. With the new commitment, the firm’s contributions would total around $500 million. The reported figures do not confirm that the round closed on those terms or disclose a final ownership percentage.
Reuters also cited the Financial Times’ report that Trump Jr. received a Kalshi stake valued at $300, 000 when he joined. Kalshi has not said what will happen to that equity now that his advisory role has ended.
Prediction markets face regulatory uncertainty
The split comes amid a broader dispute over prediction-market regulation: whether event contracts fall under federal oversight by the Commodity Futures Trading Commission (CFTC) or state gambling laws. Kalshi argues that contracts listed on federally regulated exchanges fall under CFTC jurisdiction. State authorities have challenged some products as unlicensed gambling.
Prediction markets let traders take positions on event outcomes, including those involving politics, sports and culture. Each contract is tied to a specified outcome, and payouts depend on how that outcome is settled. Market rules vary, so clear terms and reliable settlement matter to participants.
A Minnesota court injunction on July 27 temporarily blocked enforcement of the state’s new prediction-market statute against CFTC-registered exchanges while related lawsuits proceeded. The statute was scheduled to take effect Aug. 1 and included criminal penalties for operating covered markets and certain supporting activities.
U.S. District Judge Katherine Menendez granted preliminary relief, finding that the plaintiffs were likely to prevail on at least part of their argument that federal law displaced the state statute. The ruling was not a final decision on the merits. The exchanges also challenged restrictions on advertising and receiving information from third parties.
The CFTC has also focused on “mention contracts, ” markets tied to whether a named person says particular words, attends an event or interacts with someone. These contracts can raise manipulation concerns because outcomes may depend on an individual’s conduct and on information other traders cannot readily verify.
In a Sept. 22, 2026, advisory, the CFTC warned that these contracts carry heightened manipulation risks. It said designated contract markets, or federally regulated exchanges, must assess each contract individually and meet requirements for products that are not readily susceptible to manipulation. The agency cited Core Principle 3 of the Commodity Exchange Act as relevant to those responsibilities.
A case involving advance access to information
The CFTC’s case against Gabriel Perez shows the risks. On Aug. 28, 2026, the agency settled charges against the former White House teleprompter operator, saying he used advance access to presidential speeches to trade mention contracts between December 2025 and February 2026.
Perez was ordered to return $107, 539.02 in trading profits, pay a $65, 000 civil penalty and accept a three-year trading ban. The CFTC credited KalshiEX with assisting its investigation. It said Perez received a substantial discount on his penalty for cooperating.
Advance access to information can give one trader an edge the rest of the market does not have. The case raises practical questions about how exchanges identify privileged information, monitor trading and settle contracts, alongside the broader debate over who has authority to regulate these products.
There is no reported evidence that the regulatory disputes led Kalshi to end Trump Jr.’s role. Kalshi said the decision followed 1789 Capital’s investment in a competitor.
Key questions and answers
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Why did Kalshi end Trump Jr.’s advisory role?
Kalshi said the two sides agreed to end it after 1789 Capital made a significant investment in rival Polymarket.
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Did Polymarket’s planned financing close on the reported terms?
The figures describe a planned round and investor commitments. They do not confirm the final terms or ownership structure.
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What will happen to Trump Jr.’s Kalshi equity?
Kalshi has not disclosed its status. Reuters, citing the Financial Times, reported that the stake was valued at $300, 000 when he joined the company.
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Has the Minnesota court settled who regulates prediction markets?
No. The injunction temporarily blocked enforcement against CFTC-registered exchanges while litigation continues. It was a preliminary ruling, not a final decision.
Prediction markets will need to show more than demand for their contracts. Clear settlement rules, safeguards against trading on privileged information and a clearer boundary between federal and state authority will help determine whether these markets can earn lasting trust.
