The financial architecture of event betting in the United States is taking on increasingly bizarre forms. Donald Trump Jr. appears to have found a way to profit from the competition between two giants of prediction markets, regardless of who emerges victorious in the legal and regulatory battles.
His venture capital fund, 1789 Capital, invested $300 million in a funding round for Polymarket, valuing the platform at $21 billion. At the same time, back in 2025, Trump Jr. acquired a stake in Kalshi when it was valued at a modest $300,000. Today, Kalshi's market capitalization has grown to $22 billion. Thus, his investments are spread across the two main competitors, creating a unique situation.
An advisor on both sides of the barricades
In January 2025, Trump Jr. took a paid position as a strategic advisor at Kalshi. Just seven months later, he joined the advisory board of Polymarket, coinciding with 1789 Capital's initial investment in that project. Now, the president's son is tied to both platforms not only financially but also by fiduciary obligations.
Such a dual role inevitably raises questions about ethics and conflicts of interest. Kalshi was quick to state that Trump Jr. is exclusively involved in marketing strategy and does not advise on regulatory matters. However, it is obvious that his influence extends far beyond formal job descriptions.
The regulatory front
I have learned that Trump Jr. personally lobbied Republican attorneys general to stop pressure on betting platforms. At a closed meeting in New Orleans, he argued that the campaign against such platforms was initiated by traditional gambling companies to protect their own businesses.
The CFTC this year filed lawsuits against nine states, attempting to block their efforts to regulate betting markets at the local level. Eight of those states are led by Democratic attorneys general. The situation has become most acute in Arizona, where a criminal case was opened against Kalshi over illegal gambling services.
It is telling that President Donald Trump himself in May called betting markets a new financial product and voiced support for keeping CFTC oversight over them. His son's interests in the leading platforms have become an integral part of the dispute over regulating the entire sector.
My analysis: Such a "hedging" strategy is rare even for experienced investors. Trump Jr. is effectively insuring himself against any outcome: if one platform loses the regulatory battle, the second will compensate for the losses. However, such an insider position creates systemic risk for the entire prediction market, as the independence of advisors is now highly questionable.