The figure of Donald Trump Jr. once again finds itself at the epicenter of financial and regulatory battles. This is not about political ambitions, but rather quite specific business interests in the field of prediction markets. His venture fund, 1789 Capital, invested $300 million in Polymarket as part of a round that valued the platform at $21 billion. At the same time, Trump Jr. himself has held a paid position as a strategic advisor at the competing Kalshi for over a year, where he also has a stake. This arrangement guarantees him financial gain regardless of who emerges victorious in this race.
Double Bottom: Advisor to Two Competing Camps
The story began in January 2025, when Trump Jr. officially took on the role of paid strategy advisor at Kalshi. Just seven months later, in August, his fund became one of Polymarket's investors. At that time, 1789 Capital had already acquired a stake in Kalshi back in 2025, when the company was valued at a modest $300,000. Today, Kalshi's valuation has soared to $22 billion, while Polymarket, after the injection from Trump Jr., is valued at $21 billion. Collectively, this makes his position virtually unassailable.
The situation looks at least ambiguous from a business ethics standpoint. An advisor who simultaneously counsels two direct competitors fighting for the same users and the same rules of the game is a classic conflict of interest. At Kalshi itself, commenting on the situation, they emphasize that Trump Jr. is exclusively involved in marketing strategy and does not interfere in regulatory matters. However, this statement only fuels skepticism, given his direct contacts with regulators.
The Regulatory Battlefield
According to available information, Trump Jr. personally persuaded Republican attorneys general to stop pressuring event betting platforms. At a closed meeting in New Orleans in March, he stated that the campaign against such platforms was initiated by traditional gambling companies seeking to protect their business. Notably, the CFTC this year filed lawsuits against nine states, attempting to block their efforts to regulate betting markets under local laws. Eight of those states are led by Democratic attorneys general. The situation has become most acute in Arizona, where criminal charges were filed against Kalshi in March for illegal gambling services.
The Trump family's interests here are obvious. The U.S. President openly called betting markets a new financial product in May, emphasizing the need to maintain CFTC control over them. Thus, his son's dual role has landed at the very center of the dispute over the future regulation of this industry. A loss by one of the platforms in any state would strike a blow to both businesses in which Trump Jr. holds a stake.
My analysis: Such interweaving of interests is a troubling signal for the market. When a key player has a financial stake in both sides of a conflict, it calls into question the objectivity of their actions and lobbying efforts. For the long-term health of prediction markets, not only market liquidity but also an impeccable reputation in the eyes of regulators is crucial. The current situation only strengthens the arguments of those calling for stricter oversight of this sector.