RESOLVING THE LEDGER
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In March, Donald Trump Jr. told Republican state attorneys general not to go after prediction markets, The New York Times reported on Thursday.
The president's son said states were being misled by gambling companies that are worried they’ll lose their “monopolies,” the Times report said, citing four people familiar with the remarks.
He added that event contract exchanges should be overseen by federal authorities, the people told the Times.
The remarks reported by the Times are notable as Trump serves as an advisor to the two largest prediction market platforms, Kalshi and Polymarket. The news comes as states are battling the federal government over who has the right to regulate event contract exchanges' sports-related offerings.
Trump provides input on Kalshi's marketing strategy and not on regulations, according to the prediction market platform. A spokesperson for Polymarket didn't directly address the report about Trump's remarks, but said that in the company's view, the Commodity Futures Trading Commission governs prediction markets and their exchanges.
A spokesperson for the president's son said Trump was invited by the Republican Attorneys General Association and spoke about regulation on prediction markets for roughly a minute.
"Don was invited by RAGA to speak at their conference and simply responded to a single question he was asked by the moderator about his opinion on prediction market regulation. Despite the dishonest implications from the New York Times, the back and forth lasted approximately one minute of the hour long Q and A and was not a focus of the event," the spokesperson said.
The CFTC has sued nine states in an attempt to block them from regulating prediction markets, eight of which have Democratic attorneys general.
Attorneys general have also piled up multiple lawsuits against prediction market platforms, with 44 of them writing to the CFTC last month that the federal agency cannot oversee sports-related event contracts.
Kalshi responded to the Times' reporting on the platform's website , detailing how it operates and functions separately from gambling operators.
"It's unprecedented and overly aggressive for states to try to shut down a federally licensed exchange. It's as if North Carolina wanted to shut down the stock market," Kalshi said on its website.
The firm also said on its website that Jim Harrell, a lobbyist for Kalshi, "helped shape" the language of a provision in the North Carolina state budget that declared a 6% tax on prediction markets versus a 23% tax on sportsbooks.
"This is literally what lobbyists do - represent client interests and help inform legislators regarding potential legislation," Kalshi said on its website.
The White House and 1789 Capital, the venture capital firm where Trump Jr. serves as a partner, did not immediately return CNBC's request for comment.
Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.
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