Kalshi Cuts Ties With Donald Trump Jr. Days After Midterms

Kalshi just cut ties with one of its biggest supporters.

The industry-leading prediction platform announced it has cut ties with Donald Trump Jr. and his venture capital firm, 1789 Capital. It blamed the group's investment in rival Polymarket for the split, and negotiations are set to begin in August. Kalshi’s positive reviews have helped it dominate US market share, but Polymarket has been aggressively targeting the industry leader.

Kalshi claims that the decision was mutual.

While 1789 Capital did in fact increase its investment in Polymarket, it has openly worked with both operators for over a year. This has led to speculation that Kalshi may have ulterior motives for the move.

One motive could involve the midterm elections, which led Democrats to take back control of Congress. It also saw Democrats take over key positions in several conservative states, replacing many of the President’s allies. 

This resounding loss means Congressional investigations will come for President Trump and his family. Calls have also emerged to include the prediction industry, giving Kalshi extra motivation to cut ties before it can begin.

However, Kalshi may also be reaching a point where it no longer needs protection from the White House. The US Supreme Court is expected to rule on the legality of sports prediction markets in 2027, a decision that will ultimately determine the industry’s future.  

Partnership About More Than Money

The 1789 Capital investment in Kalshi was significant, but the partnership was about more than money.

The bombastic Trump Jr. has been one of the industry’s most prominent allies and has loudly supported protecting sports markets. His support has given operators a sense of security and helped install industry-friendly Michael Selig as head of the Commodity Futures Trading Commission. 

While Kalshi will lose out on future investments from his group, Trump Jr.’s relationship with Polymarket will ensure the White House continues to support the industry. 

It will also make negotiations with Democrats easier by removing the Trump family from discussions. With the party controlling Congress and several states for at least the next two years, Kalshi hopes to improve its relationship with liberal lawmakers.