Prediction-market operator Kalshi has ended Donald Trump Jr.’s advisory contract after his venture capital firm, 1789 Capital, expanded its investment in rival Polymarket. Kalshi described the November 12 announcement as a mutual commercial decision, saying discussions began in August when the investment firm’s latest backing of the competitor came to light.
The split ends a relationship that began in January 2025, when Kalshi brought in the president’s son to help promote event-contract trading to new audiences. By then Trump Jr. had also become a prominent investor and adviser in the wider prediction-market industry. His departure comes as lawmakers prepare further scrutiny of the sector, although Kalshi denies that politics influenced its decision.
The distinction matters. Reuters reported that two people familiar with the company had raised concerns about the possible implications of congressional investigations after Democrats won control of both chambers in the midterm elections. A Kalshi spokesperson said the company had neither considered nor discussed those political implications and cited the conflict involving Polymarket alone.
1789 Capital’s larger Polymarket stake triggered the split
Kalshi announced Trump Jr. as a strategic adviser on January 13, 2025, saying his experience and connections would support marketing, partnerships and adoption of prediction markets. According to Reuters, he was compensated in equity. The Financial Times reported that the stake was worth approximately $300,000 when granted.
In August 2025, Polymarket separately announced that Trump Jr. had joined its advisory board and that 1789 Capital, where he is a partner, had made an investment. That arrangement meant he was associated with both businesses before this year’s latest financing. Kalshi has not said that the earlier Polymarket advisory appointment alone caused his exit.
The material change was 1789 Capital’s additional commitment in 2026. Reporting in September placed the venture firm’s proposed contribution at around $300 million in a planned $1 billion Polymarket funding round, with a reported valuation of about $21 billion. Those are reported deal terms, not a public accounting of shares ultimately issued or a confirmed current value for Trump Jr.’s indirect interest.
Kalshi said its discussions about ending the arrangement started in August and that the two sides later agreed to part ways. It thanked Trump Jr. for helping extend its reach. Neither the terms of his departure nor whether he kept, sold or forfeited his Kalshi shares were disclosed. His advisory contract ending does not, by itself, establish that every financial connection to Kalshi has ended.
For competing trading venues, the issue is more than a symbolic association. Advisers can see commercial plans, customer-acquisition strategies and proposed partnerships that a rival would find useful. Reuters has not reported that Trump Jr. shared confidential information or that either company alleged a breach. The commercial overlap explains the disclosed concern without proving misconduct.
Kalshi disputes reports that politics affected its decision
Reuters reported that some people inside Kalshi considered the risk that Trump Jr.’s continued role could attract questions from a Congress newly controlled by Democrats. The company’s spokesperson directly disputed that account, saying political considerations had no role in the separation and were not discussed as part of it.
Those conflicting descriptions should not be merged into a single motive. The Polymarket investment was an acknowledged source of conflict and had been discussed since the summer. The reported concerns about congressional reaction rest on unnamed sources and have not been accepted by the company as an explanation.
Public scrutiny of prediction markets, however, predates the midterm result. In September, the House Oversight Committee expanded an investigation into suspicious event-contract trading and the controls used by platforms to identify users. More recently, senators Elizabeth Warren and Jeff Merkley asked the White House for answers about trading on confidential presidential information, following an enforcement settlement involving a former employee. Those inquiries do not accuse Trump Jr. of executing the trades at issue.
Money and political access have also become part of the discussion. DaveFinances previously examined reported political contributions exceeding $5 million by Kalshi, Polymarket and their founders during the 2026 election cycle. Such donations and advisory relationships can create questions about potential conflicts, but neither is evidence on its own that regulators granted improper favors.
What the departure changes for Kalshi and Polymarket
Kalshi has been described in recent reports as pursuing a valuation near $40 billion, while Polymarket’s latest financing has been discussed at a lower reported valuation. Those figures represent private-market estimates or fundraising terms, not audited revenues, realised proceeds or directly comparable listed share prices.
The immediate consequence is narrower: Kalshi no longer has Trump Jr. in the named strategic-adviser position, while his firm’s reported exposure to Polymarket remains. The companies have not published the advisory compensation schedule, the value of any vested Kalshi interest, or details of information barriers that may have been used when he held roles in both businesses.
The change also leaves their major regulatory challenge intact. Louisiana’s latest announced lawsuit against prediction-market businesses illustrates the ongoing dispute over whether federally regulated event contracts can be restricted under state gambling rules. Federal and state authorities continue to contest that jurisdictional boundary regardless of which advisers the platforms hire.
For investors assessing the sector, the questions are now about ownership, goverance and disclosure rather than the contract’s headline alone. Kalshi has confirmed the end of a marketing advisory relationship and the business reason it gives for that decision. It has not disclosed how Trump Jr.’s equity was treated, and Reuters’ account of internal political concerns remains disputed. The split resolves the visible advisory overlap; it does not settle either company’s broader political or regulatory exposure.
Johan Shamshad is Editor-in-Chief at Dave Finances, covering financial markets, digital assets, trading platforms, brokers, fintech, payments and regulation. Since 2023, he has also worked as an editor at Gulf News, the UAE English-language newspaper published by Al Nisr Publishing LLC. His work focuses on market-moving developments, company disclosures, regulatory changes and trading infrastructure, with an emphasis on primary-source verification and practical context for traders and investors.