A legal dispute over the future of Kalshi, Polymarket and others has drawn in the Trump administration, the president’s son and nearly every state attorney general.
By David Yaffe-Bellany and Sharon LaFraniere
David Yaffe-Bellany reported from New York and Sharon LaFraniere from Washington.
In early March, Donald Trump Jr. made a pitch to a crowd of Republican state attorneys general who had gathered for a three-day retreat at the Ritz-Carlton hotel in New Orleans.
Mr. Trump, the president’s eldest son, has repeatedly promised to keep his family’s business interests separate from the work of the administration. But at the closed-door event, he stepped into the middle of a ferocious legal battle over whether states or federal agencies should police prediction markets, a booming new industry in which the Trumps have a financial stake.
Sitting onstage for a question-and-answer session with Montana’s attorney general, Mr. Trump suggested that state leaders were being led astray by a “vested interest” — gambling firms that wanted to protect their “monopolies” by attacking prediction markets, four people familiar with his remarks said. In reality, he said, the markets already had robust oversight, describing them as a sophisticated financial tool overseen by federal officials, not state attorneys general.
Mr. Trump’s tone was friendly, the people said. But his comments, which have not been previously reported, dovetailed with a message his father’s administration has sent to state leaders: Back off.
In lawsuits across the country, red and blue states have united to take on prediction markets like Kalshi and Polymarket, setting up a courtroom battle that will determine whether Americans can use them to bet on sports, politics and virtually everything else.
In total, 20 states are locked in litigation over whether the prediction markets are subject to state laws governing sports betting. Last month, 44 states signed a letter attacking the platforms as a “new form of casino” preying on young people.
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