Donald Trump Jr. is all set to join predicting market and wagering exchange Kalshi as a strategic advisor. The platform has just won a battle with the US Commodity Futures Trading Commission, as it took part in the presidential election outcome. Trump Jr. is well-positioned to act as an advisor, and Trump himself stated admiration for Kalshi for being able to forecast the outcome of the election better and faster than overseas betting sites and sportsbooks.

Donald Trump Jr., the oldest son of President-to-be Donald Trump, has joined wagering exchange and platform Kalshi in an advisory role. This move aligns Trump Jr. with a platform at the center of debates on the legality and ethics of event-driven betting, especially on political outcomes.

Kalshi, founded in 2018 by financial analysts Luana Lopes Lara and Tarek Mansour, allows users to bet on a range of topics, including election results and weather patterns. It operates under the oversight of the United States Commodity Futures Trading Commission, which granted the platform a license to operate derivative markets in 2020. However, Kalshi has faced regulatory hurdles concerning its political betting markets.

Trump Jr.'s endorsement of Kalshi

Donald Trump Jr. cited Kalshi's accuracy in forecasting events and elections as a major reason for joining the platform. "On Election night at Mar-a-Lago, while biased outlets called the race a coin toss, my family and close friends used the prediction market Kalshi to know we won hours ahead of the fake news media," said Trump Jr. "I immediately knew I had to contribute to their mission. Today, I am proud to announce that I am joining Kalshi as a strategic adviser."

The addition of Trump Jr. to Kalshi's advisory team comes at a pivotal time, with the company navigating regulatory battles and seeking to solidify its position in the event-driven wagering market.

Kalshi's regulatory challenges

Kalshi's journey has been marked by legal and regulatory disputes. The CFTC, while under President Joe Biden's administration, has scrutinized platforms like Kalshi and its offshore competitor, Polymarket, for allegedly operating as unregulated gambling platforms. In October 2022, the CFTC ordered Kalshi to cease political betting markets, citing violations of federal and state gambling laws.

Kalshi challenged the directive in court, arguing that the CFTC overstepped its authority. A federal judge sided with Kalshi shortly before the 2024 presidential election, allowing the platform to reinstate its political betting markets. The ruling was a significant victory for Kalshi, although the CFTC has appealed the decision.

With Rostin Behnam, CFTC Chair, expected to depart and the incoming Trump administration favoring deregulation, Kalshi's future appears more secure. Trump Jr.'s appointment could further strengthen the platform's ability to influence policy discussions and regulatory decisions in Washington, DC.

Implications for offshore rivals

Kalshi's move to bring Trump Jr. on board could signal a renewed focus on its competitors, particularly Polymarket. The cryptocurrency betting exchange based in New York faced a $1.4 million fine in 2022 for operating event markets without proper authorization. As part of its settlement, Polymarket agreed to restrict access for US-based users.

Polymarket has also enlisted a prominent adviser in Christopher Giancarlo, the former CFTC chair known as 'Crypto Dad' for his support of blockchain and cryptocurrency initiatives. Giancarlo's influence and Polymarket's offshore operations could set the stage for a regulatory showdown between the two platforms.

Kalshi's mission and future

Kalshi, which translates to 'everything' in Arabic, aims to provide a regulated space for users to bet on everyday events. Despite its legal challenges, the platform has grown significantly since its launch in 2021. Its licensing under the CFTC marked a milestone in the US derivatives market, legitimizing event-driven wagering in a way that offshore sportsbooks cannot claim.

Trump Jr.'s addition to Kalshi's advisory team is likely to boost the platform's efforts to expand its offerings and address regulatory concerns. His influence, combined with a potentially more favorable political environment, could pave the way for Kalshi to maintain its foothold in the event wagering space, particularly in political markets.

As the Trump administration prepares to take office, Kalshi's decision to align itself with the president-elect's inner circle demonstrates its ambition to become a leading player in the prediction market industry.