HedgeCo.Net — Prediction market Kalshi has ended its advisory contract with Donald Trump Jr. because his venture capital firm, 1789 Capital, holds a stake in rival platform Polymarket, a Kalshi spokesperson said, according to CNBC. The Associated Press and The Washington Post also reported the departure on November 12.
Discussions about the exit began in August, after 1789 Capital announced a major stake in Polymarket, the spokesperson said. The separation was mutual, with both sides agreeing that it was a conflict of interest for Trump Jr. to advise Kalshi while serving as a top investor in Polymarket. He continues to serve as an adviser to Polymarket. Kalshi first named Trump Jr. a strategic adviser in January 2025.
The timing is notable. The departure comes after Democrats secured majorities in both the House and the Senate, and the party is expected to take a tougher line on the prediction market industry. In October, Kalshi CEO Tarek Mansour acknowledged that the connection created an “optics issue,” while saying the company had never relied on the relationship to gain favor with the government.
Prediction markets have become a venture and institutional story this year. Kalshi raised $1 billion at a $40 billion valuation in October in a round co-led by Sequoia and Wellington, and prime brokers have begun moving to give hedge funds access to event contracts. That growth has drawn political attention to the sector’s ties in Washington.
For investors in the space, governance and regulatory risk are now central to the thesis. Cleaner separation between the two leading platforms reduces one line of attack, but a new Congress and a reconstituted oversight agenda could reshape how event contracts are regulated, and how much of the market’s recent valuation momentum holds.