Trump Jr Dumped by Kalshi as Democrats' Congress Victory Puts Trump Family Deals in the Spotlight

Donald Trump Jr's lucrative links to rival prediction-market giants have landed him in a fresh political storm after Kalshi ended his paid advisory role, bringing renewed attention to the Trump family's financial interests and the industry's growing influence in Washington.

The split followed a major investment in Kalshi's competitor, Polymarket, by 1789 Capital, the venture capital firm where Trump Jr is a partner. But the timing has added another explosive layer: Democrats have won control of both chambers of Congress and are preparing to intensify scrutiny of businesses linked to the president's family.

Trump Jr's Financial Ties to Kalshi and Polymarket

Kalshi appointed Trump Jr as a strategic adviser in January 2025, shortly before his father's second inauguration. The role reportedly came with an equity stake valued at around $300,000 (£226,805) at the time, according to the Financial Times.

He later joined the advisory board of Polymarket. His investment firm, 1789 Capital, also deepened its financial commitment to the rival platform, contributing about $300 million (£226.81 million) to a $1 billion (£755.59 million) funding round that valued Polymarket at approximately $21 billion (£15.87 billion), according to CoinDesk. The firm had previously invested around $200 million (£151.12 million).

Kalshi spokesperson Dani Lever confirmed the departure, saying: 'We have mutually agreed to end Don's advisory role after his firm's significant investment in a competitor this past summer.' She added that the company was grateful for his help in bringing Kalshi to more customers.

Reuters reported that discussions about ending the arrangement began in August, after 1789 Capital's investment became public. Kalshi said the decision was based on the conflict created by the investment, and denied that political considerations played any part.

However, two sources familiar with the matter told Reuters that concerns had also been raised internally about the prospect of congressional scrutiny. They said Trump Jr's position could expose the company to questions from lawmakers after the Democratic election victory. Kalshi disputed that account, saying political implications had not been considered or discussed.

Democrats Prepare To Probe Prediction Markets

The departure comes as prediction markets face mounting questions over insider trading, political influence and bets involving sensitive government activity.

On 10 November, Democratic Senators Elizabeth Warren and Jeff Merkley pressed White House Counsel Will Scharf for answers about safeguards against officials using confidential government information to make bets.

Their inquiry followed reports that former Trump teleprompter operator Gabriel Perez used advance knowledge of presidential speeches to wager on words Trump would say. A Commodity Futures Trading Commission settlement required Perez to pay $172,539.02 (£130,370) and barred him from trading for three years.

The White House has said federal ethics rules already prohibit employees from using non-public information obtained through government work for personal financial gain.

Warren is expected to lead the Senate Banking Committee when the new Congress convenes in January, putting prediction-market oversight firmly on the political agenda.

Trump Jr's Role in the Wider Regulatory Fight

Trump Jr's involvement has extended beyond corporate advisory boards. The New York Times reported that he addressed Republican state attorneys general at a private gathering in New Orleans in March, where he defended prediction markets as federally regulated financial instruments rather than gambling.

The debate has become a major legal battle, with states challenging sports-related contracts and arguing that the platforms evade state gambling laws. The Trump administration and federal regulators have backed a broader federal role.

A spokesperson for Trump Jr told the Times that he does not deal with the federal government on behalf of companies he invests in or advises.

Leaving Kalshi may end one contentious business relationship, but it does little to quiet the wider questions surrounding Trump Jr's continuing Polymarket ties, his firm's investments and the political influence surrounding an industry now facing a tougher Congress.