Prediction market platform Kalshi has ended its advisory contract with Donald Trump Jr. after his venture capital firm, 1789 Capital, invested heavily in chief rival Polymarket, according to statements released on November 12, 2026. MS NOW reported that discussions to unwind the arrangement began in August following Polymarket’s major funding round, which was led by 1789 Capital.
Kalshi spokesperson Dani Lever confirmed the move in a statement published by the New York Post, stating that the two sides mutually agreed to conclude the advisory role following the competitor investment this past summer. Trump Jr. originally joined Kalshi as a strategic advisor in January 2025, receiving an equity stake initially valued at $300,000, while also maintaining ties and advisory positions across the rapidly expanding prediction market sector.
Regulatory Scrutiny and Capitol Hill Pressure
The leadership shift arrives as prediction markets face intense oversight from lawmakers in Washington. Following the 2026 midterm elections, incoming congressional majorities have vowed to pursue stricter regulations on event-contract platforms. MS NOW noted that Democratic lawmakers have sent inquiries to the White House regarding potential insider trading and platform usage by government employees.
While Kalshi representatives insisted that politics played no role in the decision to drop Trump Jr., internal discussions involved managing potential fallout amidst rising congressional investigations into the industry. Kalshi is reportedly eyeing a $40 billion valuation in new fundraising rounds, while Polymarket is targeting a valuation above $20 billion, underscoring the high-stakes commercial competition driving the split.
Legal Battles and State-Level Pushback
Beyond federal legislative oversight, prediction markets remain locked in a contentious legal battle with state regulators over operational authority. States argue that sports-related contracts on these platforms violate local gambling laws and divert tax revenue. Meanwhile, the Commodity Futures Trading Commission has sought to reinforce federal oversight, setting up potential showdowns heading toward the Supreme Court.
As the industry navigates these regulatory hurdles, Trump Jr. and 1789 Capital did not immediately respond to requests for comment regarding the termination of the advisory agreement. Kalshi officials maintained that despite the optics surrounding high-profile political connections, platform operations remained strictly partitioned from political influence.