Prediction market giant Kalshi has ended its advisory contract with President Donald Trump’s eldest son after his venture capital firm placed a significant investment with the company’s leading rival. The split follows 1789 Capital’s major investment in Polymarket.

“We have mutually agreed to end Don’s advisory role after his firm’s significant investment in a competitor this past summer,” Kalshi spokesperson Dani Lever said in a statement to MS NOW. Lever added that Kalshi is “grateful” for Trump Jr.’s early marketing help.

Discussions about ending Donald Trump Jr.’s advisory role began in August, according to a person familiar with the decision making process. That person spoke on background because they were not authorized to discuss the decision publicly.

Kalshi officials and Trump Jr. discussed his firm’s Polymarket investment and his position on Polymarket’s advisory board during the fall. They ultimately agreed that advising both prediction market giants in a rapidly changing industry represented a conflict of interest.

Trump Jr. previously served on the advisory boards of both Kalshi and Polymarket. He holds a large volume of Kalshi shares, while 1789 Capital has invested heavily in Polymarket, creating the sort of overlapping arrangement that eventually became untenable.

Trump Jr. has publicly denied that his relationships with the companies influenced the Trump administration’s aggressive support for prediction market platforms or its position in legal disputes involving the industry and numerous states. Trump Jr. and 1789 Capital did not immediately respond to MS NOW’s request for comment.

Kalshi CEO and founder Tarek Mansour acknowledged during an MS NOW interview last month that Trump Jr.’s relationship with the company presented an “optics issue.” He maintained that the $40 billion prediction market startup never used the relationship to seek favor from federal regulators.

The controversy surrounding prediction markets has grown beyond Trump Jr.’s competing advisory roles. The Trump administration’s foreign policy decisions over the past year have drawn attention to the platforms and their potential to facilitate insider trading.

Lawmakers in both chambers have sent letters to regulators and introduced numerous bills addressing contracts connected to war, violence and death. Democrats have vowed to impose stricter regulations on the emerging industry after winning control of the House and Senate in the 2026 midterm elections.

Democratic Sen. Elizabeth Warren of Massachusetts is poised to become Senate Banking Committee chair when the new Congress convenes in January. In a letter first obtained by MS NOW, Warren asked the White House whether West Wing employees had placed prediction market bets and what safeguards existed to prevent potential insider trading among staff.

Warren cited Gabriel Perez, a White House teleprompter operator who allegedly made $100,000 on Kalshi by betting on words the president would use in his speeches. Perez was fired, fined $173,000 and banned from Kalshi, but he has not faced criminal charges.

Senators voted unanimously in April to prohibit themselves and their staff from trading on prediction market platforms amid concerns about insider trading by elected officials. Some House members have also moved to bar their staff from using the platforms.

Prediction markets are simultaneously at the center of a struggle between states and the Trump administration over regulatory authority. The dispute concerns whether federally regulated prediction market platforms must follow the gambling laws of the states where they operate.

That question could reach the Supreme Court this term. States have argued that sports related event contracts offered by the platforms amount to illegal betting, violate state gambling laws and drain valuable tax revenue.

President Trump has rejected that position, while the Commodity Futures Trading Commission has taken steps to assert federal authority over prediction markets. Against that charged regulatory backdrop, Kalshi has now removed Trump Jr. from an advisory arrangement that its own CEO conceded posed an optics problem.