TLDR
- Donald Trump Jr. reportedly pitched prediction markets to Republican state attorneys general at a March retreat in New Orleans.
- The White House shared its stance on state regulation with North Carolina lawmakers while they worked on prediction market legislation.
- North Carolina’s final budget added a 6% tax on prediction markets instead of banning them outright.
- Kalshi pushed back on the New York Times report, saying its answers were ignored.
- The CFTC has sued nine states over prediction market rules, and all nine are led by Democratic governors.
Donald Trump Jr. and the White House have both stepped into a growing fight between prediction market companies and state governments. A New York Times investigation found that Trump Jr. made a private pitch for prediction markets to Republican state attorneys general earlier this year.
The White House also reportedly shared its position on state regulation with lawmakers in North Carolina.
These moves add a political layer to a fight that has already spread through courts and statehouses across the country.
Trump Jr.’s Pitch to State Attorneys General
In early March, Trump Jr. spoke at a three-day retreat for Republican state attorneys general in New Orleans. He appeared alongside Montana Attorney General Austin Knudsen.
Montana was one of the first states to challenge Kalshi’s sports contracts. State regulators sent cease-and-desist letters before Kalshi sued Knudsen in federal court.
According to people familiar with the remarks, Trump Jr. argued that traditional gambling companies were pushing state officials to act against prediction markets to protect their own business.
He also described prediction markets as financial products that belong under federal oversight, not state rules.
Trump Jr. has financial ties to this industry. He joined Kalshi as a strategic adviser in January 2025 and received about $300,000 in company shares. He also advises Polymarket, and his firm, 1789 Capital, holds a stake in that company.
A spokesman for Trump Jr. said he does not deal with the federal government on behalf of companies he invests in or advises.
Kalshi responded to the Times report directly. The company said the outlet asked questions, then left out answers that did not fit its story.
North Carolina’s New Tax Law
Separately, the White House Office of Intergovernmental Affairs gave North Carolina lawmakers information on the federal government’s position on state regulation, according to a spokesman for House Speaker Destin Hall.
Earlier in the year, three North Carolina lawmakers introduced a bill that would have banned residents from using prediction markets. That bill never made it past committee.
The state’s final budget went a different direction. It placed a 6% tax on prediction markets, while confirming that platforms registered with the CFTC can operate without a state license.
Former lawmaker and current Kalshi lobbyist Jim Harrell reportedly helped shape that provision. Kalshi says the tax rate matches what sportsbooks pay in overall state revenue, even though the percentage looks different.
North Carolina’s law has already reached a courtroom outside the state. Kalshi cited it in the Ninth Circuit as evidence that state taxes and federal regulation can work together, in its ongoing case against Nevada officials.
Nevada argues the opposite, saying Kalshi’s support for the tax undermines its claim that states have no authority at all.
The CFTC, meanwhile, has sued nine states over prediction market rules. All nine are led by Democratic governors, though Republican officials in states including Nevada, Ohio, Montana and Tennessee have also acted against the platforms.
A CFTC spokesman said the agency did not choose these states for political reasons, adding that the states chose themselves through their own actions.
