Prediction-Markets Venue Kalshi Appoints Donald Trump Jr. as Adviser
Donald Trump Jr. is joining prediction-market startup Kalshi as a strategic adviser, a hire that could help the company expand its betting business.
Kalshi lets users bet on the outcome of future events, from U.S. elections to news to economic-data releases. The platform burst into the spotlight during the recent election, when many traders turned to its yes-or-no contracts to wager on whether Kamala Harris or Donald Trump would win the contest.
A day before the election, bettors on Kalshi assessed the chances of a Trump victory at about 55%—correctly anticipating the result. The accurate call in the tight race handed a win to the proponents of prediction markets.
“After using Kalshi on election night to track our victory in real time…it was obvious that prediction markets were going to upend mainstream media,” Trump Jr. said in a statement. “I’m thrilled to be joining them.”
Tarek Mansour, Kalshi’s co-founder, said Trump Jr. would advise the company on forging new partnerships and reaching a broader audience as it looks to “aggressively expand” the business.
Trump Jr. has said he would stay out of his father’s administration but has forged a path on Wall Street while going all-in on the anti-woke economy . He recently joined venture-capital firm 1789 Capital to invest in companies espousing conservative values and what it calls the “Republican/Parallel” economy. He is also on the board of Trump Media & Technology Group, which operates the social-media platform Truth Social.
Kalshi faces regulatory hurdles in Washington, even after winning a landmark court ruling last fall that paved the way for election betting.
The limits on what types of contracts can be listed on regulated U.S. prediction markets aren’t entirely clear. Under the 2010 Dodd-Frank financial overhaul law, Congress prohibited contracts tied to terrorism, assassination, war, gaming or activities banned by federal or state law. But the details of what contracts are covered by that ban were left to the Commodity Futures Trading Commission. Friendly leadership at the CFTC could help Kalshi expand into markets that the agency previously opposed.
Under the Biden administration, the Democratic-led CFTC proposed a rule clarifying that it wouldn’t allow event contracts tied to elections, sporting competitions and awards shows . After a federal judge allowed Kalshi to offer election betting, the CFTC appealed the decision—a fight that is still playing out in the final days of the Biden administration. Oral arguments are set for Friday in the District of Columbia Court of Appeals.
Kalshi turned its futures exchange “into an online casino,” the CFTC said in a December filing to the appeals court.
One of the most prominent contracts on Kalshi’s site last week was a yes-or-no bet tied to how many immigrant deportations would occur in the first year of Trump’s administration. Bettors recently assessed a roughly 53% chance that there would be at least half a million. Other contracts let traders profit from whether Trump would buy “at least part” of Greenland, or whether Meta Platforms founder Mark Zuckerberg would appear at Trump’s inauguration.
High-level help from Trump Jr. could also help Kalshi fight its offshore rival, Polymarket, which enjoys higher trading volumes and fewer regulatory restrictions. Polymarket isn’t registered with the CFTC and isn’t permitted to allow trading by Americans, but it has been exploring creating a regulated U.S. marketplace.
Since 2022, Polymarket has had its own Washington veteran as an adviser: J. Christopher Giancarlo, a Republican former chair of the CFTC known as “CryptoDad” for his embrace of cryptocurrencies.
Mainstream brokerages including Robinhood Markets and Interactive Brokers are among those that have integrated a prediction market into their platforms, offering yes-or-no bets to rookie investors. Susquehanna International, one of the biggest high-speed trading firms,
recently launched a trading desk
that specializes in buying and selling Kalshi contracts.
Election bets are just one of several ways the financial markets have grown
riskier than ever
for individual investors in recent years. Everyday investors have flocked to yes-or-no bets alongside wagers on cryptocurrencies and
one-day options trades offering roller-coaster returns
.
Write to Gunjan Banerji at [email protected] and Alexander Osipovich at [email protected]