Kalshi Cuts Ties With Donald Trump Jr. Over Polymarket Stake

Kalshi and Donald Trump Jr. have parted ways. According to a Reuters report published Thursday, the prediction market operator confirmed that Trump Jr. no longer advises the company, and it attributes the split to a conflict of interest: his venture firm, 1789 Capital, is leading a $1 billion fundraise for Polymarket, Kalshi's biggest competitor. Kalshi insists politics had nothing to do with it, though sources cited by Reuters describe some unease inside the company following the US midterm elections.

What Kalshi says happened

A company spokesperson told Reuters that the separation was a joint decision, describing the two sides as having "mutually agreed" to wind down the arrangement. Conversations about doing so reportedly started in August, once it emerged that 1789 Capital would head Polymarket's latest financing.

The size of that financing explains why the dual role became hard to sustain:

• Polymarket is raising $1 billion in the round.
• The deal would put Polymarket's valuation at $21 billion.
• 1789 Capital is expected to supply roughly $300 million of the total.

In the spokesperson's framing, an adviser whose firm had placed a bet of that scale on a direct rival could not reasonably stay on.

Background: two rivals and one adviser

Kalshi and Polymarket are the two best-known names in prediction markets, platforms where users trade contracts tied to the outcome of real-world events such as elections, economic data releases and sports results. In general terms, the two have taken different routes: Polymarket grew up as a crypto-native venue, with trading built on blockchain rails and stablecoin settlement, while Kalshi built its business as a federally regulated US exchange. That makes their rivalry closely watched by digital asset investors, since it doubles as a test of which model wins the category.

Trump Jr. came on board at Kalshi in January 2025 with the title of strategic adviser. The Financial Times has reported that he was granted equity as part of the arrangement, valued at $300,000 when it was issued. The sources do not say what becomes of that stake now that the advisory relationship is over.

His venture capital vehicle, 1789 Capital, subsequently deepened its exposure to Polymarket, culminating in its lead position in the current round. For a period, then, Trump Jr. was simultaneously advising one of the two market leaders and financially backing the other.

The political question

Kalshi's spokesperson was explicit that political calculations did not drive the outcome. Reuters, however, cited two sources with knowledge of the situation who offered a more layered picture. They said certain people at Kalshi had voiced worry over how the company might fare now that Democrats have won control of the House and Senate in the midterms.

The two accounts are not necessarily contradictory. A competitive conflict can be the formal reason for a separation while a shifting political landscape makes that separation more convenient. Still, the company's official position is that the Polymarket investment alone explains the move, and the internal concerns are attributed only to unnamed sources.

What to watch next

For anyone following the prediction market sector, the more consequential number here is not the adviser's departure but the valuation attached to Polymarket. A $21 billion price tag, if the round closes on those terms, points to how much capital is now chasing event-based trading, and to how firmly the Trump-linked 1789 Capital has chosen its side in the contest.

Several questions remain open. Neither source says whether the Polymarket round has formally closed, nor how Trump Jr.'s Kalshi equity will be handled. It is also unclear whether a Democratic-controlled Congress will actually take a harder look at prediction markets, or whether the worries reported inside Kalshi were merely precautionary. How lawmakers approach the sector in the coming months, and whether Kalshi responds to its rival's war chest with fundraising of its own, are the developments most likely to shape the next chapter.