Trump Jr’s fund 1789 Capital leads a $1bn round valuing Polymarket at $21bn

Donald Trump Jr is a partner at the fund leading Polymarket’s new funding round. He is also a strategic adviser to Kalshi, Polymarket’s principal competitor.

1789 Capital is putting about $300m into a round of roughly $1bn that values Polymarket at $21bn, Forbes reported. Other investors in the round have not been named.

The firm was already on the register. It had previously invested about $200m when Polymarket was valued at roughly $15bn, so the new cheque takes its total commitment to around $500m.

A $15bn valuation becoming $21bn is a 40% increase in a matter of months. That is a fast repricing for a company whose regulatory position in its largest market remains unsettled.

The new number puts Polymarket close to level with Kalshi, which was valued at about $22bn in May. Two prediction markets are now worth more than $40bn between them, in a sector that barely existed commercially three years ago.

Trump Jr’s role at 1789 Capital covers new investment origination, capital raising and strategy. He took the Kalshi advisory position in 2025, before this investment.

Neither company has commented on the arrangement. It is an unusual one in a two-horse race.

Prediction markets sell a product that is easy to describe and hard to classify. Users buy contracts that pay out if a stated event occurs, which is either a derivative or a bet depending entirely on who is doing the classifying.

The regulatory backdrop is what makes the position valuable. The Trump administration has argued that the Commodity Futures Trading Commission should be the sole regulator of these platforms, which would settle a question the industry badly wants settled.

State officials disagree, and there are a lot of them. At least 20 states are in litigation with prediction market operators over sports wagering, and 44 state attorneys general contend the CFTC has no authority over sports-related contracts.

Congress has its own view. Bipartisan legislation has been proposed to bar CFTC-regulated platforms from offering sports contracts at all, which would remove a substantial share of the volume these valuations assume.

Sports is where the money and the fight both are. Election and news markets generate attention, but sports contracts generate the volume that supports a $21bn valuation, which is precisely why the attorneys general have concentrated there.

Trump Jr has described prediction markets as federally regulated instruments with robust oversight, at an event with conservative state attorneys general. That is the argument the sector needs to win, made by someone with positions on both sides of it.

Europe has been considerably less accommodating. Spain blocked both Polymarket and Kalshi over missing gambling licences, treating them as betting operators rather than as financial exchanges.

That is the fundamental disagreement in one decision. If a prediction market is a derivatives venue, it belongs to financial regulators, and if it is a bookmaker, it belongs to gambling regulators, and the answer differs by jurisdiction.

The distinction is not academic for anyone operating in both places. A company licensed as an exchange in Washington and blocked as an unlicensed bookmaker in Madrid is running one product under two incompatible legal theories.

Polymarket has also been demonstrating the operational risks of the model. A Google engineer was charged over using internal search data to bet $2.7m on the platform, and a $345m market on an Iran peace deal stalled on what the word permanent meant.

Neither is an edge case. A market that pays out on real-world events needs someone to rule on what happened, and that ruling is always worth attacking.

Investors are evidently pricing a favourable outcome. A $21bn valuation assumes the CFTC prevails, the sports ban fails, and European markets eventually open, none of which has happened yet.

None of it has slowed the money. A sector facing 44 attorneys general, a congressional bill, and a European regulator that calls it gambling has just raised a billion dollars at a $21bn valuation.