Donald Trump Jr. told a gathering of GOP state attorneys general in New Orleans this spring not to regulate prediction market businesses. He said gambling companies were attacking firms like Kalshi and Polymarket to defend their own monopolies.
“Back off the idea of regulating any prediction markets.” That message landed while 20 states are already in litigation over whether these markets fall under sports gambling laws, and while states are trying to recoup state tax revenue estimated at at least $2 billion a year.
Kalshi, Polymarket and Trump Jr.
Trump Jr. is not a distant observer. Kalshi hired him as an adviser in January last year, he sits on the board of Polymarket, and his investment firm, 1789 Capital, has a stake in Polymarket. That puts him inside the business he is defending while asking Republican state attorneys general to stand down.
Donald Trump has also said prediction markets already have oversight from the federal government. The clash matters because the fight is not happening in one lane. Republican and Democratic state governments are both pursuing legal action against prediction markets, so the pressure is coming from both sides even as Trump Jr. pushes in the opposite direction.
States Push Back Hard
The state response hardened in July, when 44 states signed a letter calling prediction markets a new form of casino and saying they endanger young people. In March, Arizona became the first state to criminally charge Kalshi for allowing people to bet on elections and operating an illegal gambling business. The legal fight now runs through state courts and could end up at the Supreme Court.
A separate fight over prediction market oversight has already shown how quickly the business can become a wider regulatory battle. For readers using these markets or backing them, the immediate issue is whether state attorneys general keep pressing ahead or absorb Trump Jr.’s warning and pull back.
