A New York Times investigation published Aug. 27 reveals that the Trump Jr White House prediction market fight now runs deeper than public statements, with Donald Trump Jr. and administration officials both engaging directly with state officials shaping prediction market policy.
The reporting adds a political dimension to an already active legal fight between prediction market platforms and state regulators. President Trump has publicly backed the industry, calling prediction markets a “new form of financial market” in May and pushing to keep them under the Commodity Futures Trading Commission’s exclusive federal oversight.
The table below summarizes the key events the investigation covers.
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| Event | What Happened |
| Early March 2026 | Trump Jr. speaks at a Republican state AG retreat in New Orleans, alongside Montana AG Austin Knudsen |
| Earlier in 2026 | NC Rep. Pricey Harrison introduces House Bill 1171, which would have banned residents from prediction market gambling |
| 2026 NC budget | Lawmakers instead impose a 6% tax on prediction markets and recognize CFTC-registered platforms can operate without a state license |
| Ongoing | White House Office of Intergovernmental Affairs shares the administration’s position on state regulation with NC lawmakers |
| Ongoing | CFTC has sued nine states over prediction market regulation, all led by Democratic governors except Kentucky’s AG-driven case |
| Aug. 27, 2026 | The New York Times publishes an investigation detailing Trump Jr.’s and the White House’s involvement |
Source: New York Times investigation, reported via Gambling Insider, Aug. 27, 2026.
The Trump Jr White House Prediction Market Fight Begins With a Pitch to State AGs
Trump Jr. spoke at a three-day Republican state attorneys general retreat in New Orleans in early March. He appeared in a question-and-answer session alongside Montana AG Austin Knudsen.
Knudsen’s presence carried weight given Montana’s early challenge to Kalshi’s sports event contracts. State regulators sent cease-and-desist letters before Kalshi sued Knudsen in federal court.
According to four people familiar with the remarks, Trump Jr. argued that state officials opposing prediction markets were influenced by traditional gambling companies trying to protect their market position. He described prediction markets as sophisticated financial products that belong under federal, not state, oversight.
Trump Jr. has financial ties to the industry. He joined Kalshi as a strategic adviser in January 2025 and reportedly received about $300,000 in company shares as compensation. He also advises Polymarket, and his investment firm, 1789 Capital, holds a stake in that company.
A spokesman for Trump Jr. told the Times he does not interact with the federal government on behalf of any company he invests in or advises. Kalshi separately said Trump Jr. advises on marketing strategy but not on regulatory matters.
How the White House Engaged with North Carolina
North Carolina lawmakers considered House Bill 1171 earlier this year, introduced by Democratic Rep. Pricey Harrison and two colleagues. The bill would have classified prediction markets under the state’s gambling laws and barred residents from using them. It never advanced past committee.
The state budget that eventually passed took a different approach, applying a 6% tax to prediction markets while acknowledging that CFTC-registered platforms may operate without a separate state license. Sports betting revenue, by comparison, is taxed at 23% under the new budget.
Former state legislator and current Kalshi lobbyist Jim Harrell reportedly helped shape that provision through discussions with Republican House leadership, and Kalshi’s input reportedly contributed to a lower tax rate than initially considered.
Separately, the White House Office of Intergovernmental Affairs shared the administration’s position on state regulation of prediction markets directly with North Carolina lawmakers, according to a spokesman for House Speaker Destin Hall. That involvement does not establish that the administration wrote the provision, but it shows direct communication between the White House and state legislators on the issue.
North Carolina’s approach has already reached federal court. Kalshi cited the state’s tax-and-recognize model in its Ninth Circuit case against Nevada, arguing state taxation can coexist with exclusive federal regulation. Nevada countered that Kalshi’s acceptance of the North Carolina tax undercuts its own argument against state authority.
A Partisan Pattern in CFTC Lawsuits
The investigation also highlights a pattern in the CFTC’s litigation strategy. The agency has sued nine states over their prediction market enforcement efforts, and Democratic governors lead all nine.
Kentucky complicates that pattern. Republican AG Russell Coleman initiated enforcement action against Kalshi and Polymarket there, and he was later named as a defendant in the CFTC’s lawsuit. Other Republican-led states, including Nevada, Ohio, Montana, and Tennessee, have also acted against prediction markets, though the CFTC has generally limited its involvement in those cases to friend-of-the-court briefs.
A CFTC spokesman denied that politics shaped the agency’s approach, telling the Times: “The C.F.T.C. didn’t pick these states, they picked themselves.” The agency maintains the pattern reflects which states pursued the most aggressive enforcement action.
Why This Political Access Matters
The investigation does not establish that Trump Jr. or the White House directly wrote any state legislation. It does show a pattern of direct engagement between administration-linked figures and the state officials deciding prediction market policy.
For an industry facing lawsuits in nine states and ongoing federal court battles, that kind of political access adds a new variable to an already unsettled legal landscape. This dynamic between Trump Jr., the White House, and state regulators is likely to keep shaping how individual states respond, and that response may determine where prediction markets can legally operate next.
Trump Jr White House Prediction Market Fight: FAQs
What did the New York Times investigation find about Trump Jr. and prediction markets?
The investigation found that Donald Trump Jr. made a closed-door pitch for prediction markets to Republican state attorneys general in March 2026. It also found that White House officials shared the administration's position on state regulation directly with North Carolina lawmakers.
What are Trump Jr.'s financial ties to prediction market companies?
Trump Jr. joined Kalshi as a strategic adviser in January 2025 and reportedly received about $300,000 in company shares. He also advises Polymarket, and his investment firm, 1789 Capital, holds a stake in that company. His spokesman says he does not interact with the federal government on behalf of companies he advises.
How did North Carolina end up taxing prediction markets instead of banning them?
A bill that would have banned residents from using prediction markets stalled in committee. The state budget instead imposed a 6% tax on prediction markets while recognizing that CFTC-registered platforms can operate without a state license, a provision a Kalshi lobbyist reportedly helped shape.
Why has the CFTC sued nine states over prediction markets?
The CFTC has sued nine states, all led by Democratic governors, over their efforts to regulate or restrict prediction market platforms. A CFTC spokesman said the agency targeted states based on how aggressively they acted, not political affiliation, though Republican-led states facing similar disputes have seen less direct CFTC involvement.
Did Kentucky's Republican attorney general also sue prediction market companies?
Yes. Republican AG Russell Coleman initiated Kentucky's enforcement action against Kalshi and Polymarket, then was named as a defendant in the CFTC's lawsuit against the state. This makes Kentucky an exception to the otherwise Democratic-led pattern among the nine states the CFTC has sued.
How has Kalshi responded to the New York Times investigation?
Kalshi published a response arguing the Times ignored answers that did not fit its narrative. The company said Trump Jr. advises on marketing strategy, not regulatory matters, and described its North Carolina lobbying as standard advocacy reflecting how prediction markets and sportsbooks have different revenue structures.
