The companies running online prediction markets, where ordinary people bet on real-world events, can count on intense interest in what President Trump might have up his sleeve.
Traders this month are wagering millions on whether the president will take over Greenland, whom he will nominate to lead the Federal Reserve and whether the government will shut down again. Less than two weeks ago, someone netted an eye-popping $410,000 payout betting that Venezuela’s leader, Nicolás Maduro, would lose power by the end of the month.
At the intersection of the prediction market industry and Trump world is Donald Trump Jr., the president’s eldest son. He is both an investor in and an unpaid adviser to Polymarket, and a paid adviser to Kalshi, the two biggest prediction markets. And he is a director of the Trump family’s social media company, which recently announced it would start its own platform called Truth Predict.
The various hats worn by Donald Trump Jr. are an example of the ethical questions raised by Trump family business ventures during the president’s second term.
Experts see dual concerns: Prediction markets are federally regulated, and the Commodity Futures Trading Commission last year backed away from enforcement efforts against both Polymarket and Kalshi. That has created questions about whether regulators could have been swayed by simply knowing the interests of the president’s son.
Ethics experts say the younger Mr. Trump’s frequent proximity to the president, along with his advisers, their staff members and their cohorts, also naturally prompts suspicions even if he neither knows nor shares any information that could influence the markets.
Ann Skeet, the senior director of leadership ethics at the Markkula Center for Applied Ethics in Santa Clara, Calif., said that “it’s problematic to have the president’s son in the mix” because he could be among a small group of people who actually know the answers to specific White House questions that people are betting on.
Andrew Surabian, a spokesman for Donald Trump Jr., said his only involvement with prediction markets is to advise Kalshi and Polymarket on marketing strategies and to back Polymarket financially. He said that Mr. Trump does not trade on their platforms and that he never interacts with the federal government on behalf of any company he has invested in or advises.
Donald Trump Jr. is a lifelong investor and entrepreneur with ventures in cryptocurrency, real estate, drones and the distribution of pharmaceutical drugs, Mr. Surabian said, and he operates like any other businessman.
“The idea that Don, who has never worked in the government in his life, should cease working in the private sector and providing for his five children, just because his dad was elected president, is an absurd premise,” Mr. Surabian said in a statement. “The only conflict of interest that exists here is between the network of left-wing activists and their ideological allies in the media who keep using lies and baseless innuendo to smear Don.”
Mr. Trump’s involvement in prediction markets underscores how thoroughly the president’s family is enmeshed in businesses that are subject to federal government oversight. The Trump administration has taken a distinctly friendlier regulatory approach toward prediction market platforms compared with the Biden administration. That dovetails with its pullback in enforcement against the cryptocurrency industry, which has been a hugely lucrative new field for the Trump family.
It also shows how eager companies are to have a Trump ally in their corner: Polymarket and Kalshi are neck-and-neck competitors, yet Mr. Trump is an adviser to both. Since President Trump’s election, at least seven other companies have announced that his son is either an adviser, a board member or a director.
Prediction markets are exploding in popularity, offering what are typically yes-or-no questions on topics including sports, the Oscars, foreign events and the price of silver. Together, Kalshi and Polymarket, a crypto-based platform, took in nearly $50 billion in trades last year, according to an analysis by Piper Sandler, an investment bank. Some research suggests that the online markets give better real-time signals than surveys or polls because they are more nimble and people are putting their money where their mouths are.
Traders are publicly anonymous, but Tre Upshaw, whose start-up company Polysights monitors Polymarket’s platform, said some wagers suggested bettors had inside knowledge.
Mr. Upshaw said the trader who made a killing betting on the ouster of Venezuela’s leader this month, for example, bet a total of about $34,000 against very long odds. That person used a brand-new crypto account and wagered most of the funds just hours before news of Mr. Maduro’s capture broke. Mr. Upshaw said that some trades about whether the president would pardon Changpeng Zhao, the billionaire founder of the cryptocurrency exchange Binance, before he did so also stood out to him as suspicious.
Kalshi’s website states that people who have inside information or who can influence the outcome of an event are prohibited from betting on it. The company said in a statement that it forbids bets by government officials and checks trades against a database of “politically exposed people.” Shayne Coplan, Polymarket’s founder, has said his firm abides by all legal rules.
The Commodity Futures Trading Commission is supposed to police insider trading on prediction markets, but experts say the law is so vague that it is virtually impossible to enforce.
“It’s very difficult for the platforms themselves to prevent this or the C.F.T.C. to prohibit it,” said Timothy G. Massad, who led the agency under President Barack Obama. Some operators argue that the prediction markets actually benefit from traders who are in the know because it makes for more accurate odds.
During the Biden administration, the trading commission tried to limit the scope of prediction markets and forced exchanges to register with the agency. But last February, Caroline D. Pham, the acting chair at the time, said that the agency had unfairly constrained “an important new frontier in harnessing the power of markets” and that it needed to back off.
“The current commission interpretations regarding event contracts are a sinkhole of legal uncertainty and an inappropriate constraint on the new administration,” said Ms. Pham, who had served as a commissioner during the Biden administration and took over the agency temporarily under Mr. Trump. She resigned last month when Michael S. Selig, appointed by Mr. Trump as chairman, was confirmed by the Senate.
Both Kalshi and Polymarket have benefited from the agency’s lighter touch. Once targets of enforcement efforts, both companies’ chief executives are now on the trading commission’s innovation council, which was created to help shape policy on prediction markets, cryptocurrency and other issues.
In late 2023, the agency banned Kalshi from offering trades about the outcome of congressional elections, arguing that such activity would undermine state gambling bans, spread misinformation and threaten the public’s trust in elections. Kalshi sued the agency and won in federal court in late 2024.
A federal appeals court refused to temporarily halt the trading while the commission appealed, saying that the regulators had failed to prove that irreparable harm would result if it did not step in. But the court said in its October 2024 opinion that “the question on the merits is close and difficult.”
A week before Mr. Trump’s inauguration, Kalshi said it had hired the president’s son as a strategic adviser.
Four months later, the trading commission dropped its appeal of the election betting ruling.
In a statement, the company said the president’s son had nothing to do with the end of the case. “Donald Trump Jr. does not engage with government officials on Kalshi’s behalf,” it said. “We have never asked him, nor has he ever intervened in court cases for us.”
Polymarket’s dealings with the trading commission date to 2022, when it agreed to pay a $1.4 million fine for failing to register as an online trading platform. The firm was ordered to block U.S. users on its platform.
After Polymarket took in a surge of bets about the 2024 presidential election, the F.B.I. raided the apartment of Mr. Coplan, seizing his phone and other electronic devices. The trading commission also investigated.
In July, Polymarket announced that both the Justice Department and the commission had closed their inquiries. “After cooperating and engaging, we’ve been cleared of any wrongdoing,” Mr. Coplan said on social media. “Justice prevailed.”
In August, Polymarket announced that 1789 Capital, a venture capital outfit in which Donald Trump Jr. is a partner, had invested in the firm and that he would be a member of its advisory board. Asked what role the president’s son played, Mr. Coplan told “60 Minutes” in November that he needed help navigating the Trump administration.
“If I have people who believe in what I do, who understand how politics works and can help me,” he said, then “there’s nothing wrong about that.”
A week after the firm announced its new adviser, the trading commission issued a ruling that helped clear away obstacles to Polymarket’s serving U.S. traders. The agency issued another favorable ruling in November.
The approvals followed Polymarket’s decision in July to buy a company that was already licensed by the trading commission as an exchange. Polymarket’s U.S. operation is now in testing mode.
Truth Predict, a new product of Trump Media & Technology Group, may be close behind it.
In 2024, Donald Trump Jr. earned $813,000, mostly in stock, as one of the firm’s directors. That was the equivalent of nearly a quarter of the firm’s annual revenue, according to filings with the Securities and Exchange Commission. He is also the sole trustee of his father’s trust, overseeing the president’s majority stake in the company.
Shannon Devine, a spokeswoman for the firm, said last year that “Donald Trump Jr. is highly engaged in the board’s work, as well as T.M.T.G.’s operations and strategy.”
But Mr. Surabian said Mr. Trump was not involved in the decision to create “Truth Predict,” announced in October. He said that it was not a board-level resolution and that Donald Trump Jr. was not a part of the company’s day-to-day operations.
Trump Media said Crypto.com, its partner in various crypto ventures, would help run the operation. The platform will allow users of Truth Social, where the president routinely posts about official business and politics, to trade on topics including sports, inflation, interest rates, and gold and oil prices, it said.
Also on the menu: political elections.
Julie Tate contributed research.
Sharon LaFraniere is an investigative reporter focusing on the Trump administration.
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