Trump threats against Iran are a boon for prediction markets, including some backed by his son

NEW YORK (AP) — Will President Donald Trump send troops into Iran? Will he rename the Strait of Hormuz after himself? Will he post again praising Allah?

No one knows the answers, but online betting companies that allow people to wager on Trump policies and statements are profiting — including some backed by his oldest son.

Prediction markets love the president’s unpredictability, his need to keep people guessing about his next move or social media post, leading to more wagers in these betting venues and more fees for them. That includes Polymarket, a company Donald Trump Jr. has a stake in, and Kalshi, a company he advises.

These sites have to come up with new betting lines on current events everyday, and Trump Jr.’s famously fickle father has proven to be a rich source of will-he-or-won’t-he questions.

When a wagering event on Polymarket asked whether Trump was likely to send troops into Iran, nearly 100,000 bets were placed on April 8, leading to the biggest trading day of the year up to then.

And Trump’s policies and social media comments generate bets beyond the war-related ones: Who will Trump back to run Venezuela? Will his insults of Pope Leo XIV continue? Will he seize Greenland?

“Trump is the guy. He makes the market possible,” said Kwok Ping Tsang, a Virginia Tech economist who has studied Polymarket. “He’s so unpredictable.”

Sports wagers make up the largest portion of the volume on prediction markets, but politics runs a close second, according to crypto analysis firm Dune.

People are also betting “Yes” or “No” on all kinds of other things — the price of gold, the winner of “Survivor,” even the weather. The cost of the wager, in cents per dollar, reflects the number of people making the same bet, with a price of 49 cents for “Yes,” for instance, reflecting 49% odds.

The betting has drawn bipartisan criticism for inviting insider trading but the president seems to be a big fan, applying a light regulatory touch and helping the industry expand. His family company, the Trump Organization, is even working on opening its own prediction market, called Truth Predict.

One of the biggest fee generators lately has been Trump’s approach to the Iran war, notably his Truth Social post on April 5 demanding the country “Open the F—- Strait.”

Trading on Polymarket soared with “Yes” or “No” wagers on whether an invasion was imminent, according to Dune, only to be surpassed on April 7 by betting on another question — Will there be a ceasefire? — when Trump posted ominously that a “whole civilization will die tonight.”

In total, 413 million bets on the Iran war were made risking more than $100 million from Sunday, April 5, through Wednesday, April 8, the day after Trump announced a ceasefire, according to Dune.

In a report after the surge, Dune called Trump an “unpredictability machine” and marveled at how his “governing-by-tweet” style sends trading volumes soaring.

Asked whether the president’s son should be profiting from a business benefitting from his father’s actions, a Trump Jr. spokesman called the question “fact-free Democratic propaganda.”

“Don does not interface with the federal government as part of his role with any company that he invests in or advises and has no influence or involvement with administration policies relating to prediction markets,” said the spokesman, Andrew Surabian.

Polymarket didn’t respond to a request for comment.

The betting venues have jumped in popularity since Trump was reelected in November 2024 in part because they correctly predicted, unlike many pundits, that he would win decisively.

Since then the Trump administration has sued states trying to ban prediction markets under no-gambling laws. The head of the industry’s chief regulator, the Commodity Futures Trading Commission, has even promoted the business publicly, calling the online bets in a Wall Street Journal op-ed “exciting products.”

Benefiting particularly has been Polymarket, which was banned from operating anywhere in the U.S. in 2022 after the Biden administration fined it for running an unregistered exchange. It recently got permission to return, and its value has soared.

The company is now worth $9.6 billion, according to research firm PitchBook, a nearly tenfold increase in eight months since a venture capital fund in which Trump Jr. is a partner last invested.

Just how much Trump Jr. is benefiting from the increase in value is unclear because Polymarket is private and doesn’t release ownership stakes. Kalshi, which took on Trump Jr. as an adviser last year, is also private.

As for profiting off turmoil and war, Trump Jr. has other possible ways besides the prediction markets.

Through his venture capital fund he also owns pieces of aerospace, defense and technology companies seeking Pentagon contracts and other federal agency dollars. Separately, he and his brother, Eric, just struck a deal giving them stakes in a military drone maker not just selling to the U.S. forces but also pitching to Gulf countries under Iranian attack and beholden to their father for U.S. military protection in a war he started.

Asked last month about the drone company potentially profiting off his father’s position as president, Eric Trump sent The Associated Press a statement saying, “I am incredibly proud to invest in companies I believe in.”

Critics in Congress, virtually all Democrats, have decried what they believe is blatant profiting off the presidency, and are waiting for the midterms to do something about it, possibly voting for impeachment.

But whether that happens is anyone’s guess — or to be more specific, tens of thousands of guesses.

In Polymarket trading, those betting that Trump would get impeached by the end of his term were putting the chances at 13% at the start of the year. But that has changed dramatically after his “civilization wipe out” threat and calls from Democrats to oust him from office.

By Tuesday, the odds had jumped to 66%.

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AP reporters Ken Sweet in New York and Christopher Keller in Albuquerque, N.M., contributed to this story.