The Trump administration and the president's son are intervening in state-level fights over prediction market regulation. According to The New York Times, Donald Trump Jr. spoke at a closed gathering of Republican state attorneys general in March, advocating for the industry. The White House also engaged directly with North Carolina lawmakers on platform regulation.
Trump Jr. told the attorneys general that traditional bookmakers lobby for bans on prediction markets to protect their 'monopolies'. He described the platforms as complex financial products subject to federal oversight, not state jurisdiction. He has a direct financial interest: in January 2025 he became an adviser to Kalshi, receiving $300,000 in company stock, and also consults for Polymarket. His fund 1789 Capital holds a stake in the latter.
In North Carolina, Democrats initially proposed a bill treating prediction markets as gambling and barring residents from participation. It failed. The state's final budget went the opposite direction: a 6% tax on prediction markets and recognition that CFTC-registered platforms may operate without a state licence. Sports betting, by comparison, carries a 23% tax. According to the Times, Kalshi lobbyist Jim Harrell participated in negotiations with Republican leadership in the House.
The CFTC has sued nine states attempting to regulate the platforms. All nine have Democratic governors, with the exception of Kentucky, where the Republican attorney general himself launched enforcement against Kalshi and Polymarket. The regulator denies any political motive, citing the level of state aggression as the deciding factor.
