PredictIt Gets Upgrades After New Deal With CFTC
The decade-old prediction market for politics can now have unlimited users, higher position limits.
PredictIt — an early legal prediction market for election betting dating back to 2014 — is taking a big step forward, with the help of the Commodity Futures Trading Commission.
The platform that focuses on politics and elections announced a new agreement with the CFTC on Tuesday that includes several major changes.
“I’m thrilled,” PredictIt co-founder John Phillips told The Event Horizon in an interview after the announcement. “These markets are great engagement tools in the political process, and it’s a good thing to get people more engaged.”
PredictIt had been involved in a federal court case (Clarke vs. CFTC) about its ability to offer election markets legally in the US via a no-action letter; that case is now over after an apparent settlement. (Filings in the case indicated that an agreement “in principle” had been reached last month.)
Some of the changes coming to PredictIt as a result:
PredictIt had a limit of 5,000 traders previously; the updated agreement removes that limit and allows an unlimited number of participants.
In a press release provided to The Event Horizon, PredictIt quoted the new no-action letter for the rationale: "The removal of the trader cap is intended to foster broader public participation and enhance the utility of prediction markets as tools for academic research and public insight."
"PredictIt’s role in contributing meaningful data to researchers and media is a vital part of understanding political behavior and voter trends," Phillips said in a press release.
The position limit has been expanded from $850 to the federal individual campaign contribution limit of $3,500.
"This new cap strikes the right balance — it allows meaningful participation and more informative markets, while preventing billionaires from distorting the odds or overwhelming the collective voice of everyday Americans," said David Mason, PredictIt general counsel and former Federal Election Commission chair, in the press release.
According to PredictIt’s website, more markets are coming as well: “We’re dramatically expanding the number and diversity of markets available — giving traders even more ways to engage with breaking news, policy shifts, and electoral dynamics in real time.”
For now, it appears those markets will remain limited to elections and politics, without expanding into sports, cultural events, or other areas.
However, PredictIt’s parent company, Aristotle, has been in process to become a designated contract market dating back to 2021. That DCM, should it win CFTC approval, could be a path to offering markets outside of the political realm.
Regardless, PredictIt will have a chance to grow after being at odds with the CFTC. That’s a similar arc to Kalshi, which fought for its survival under the Biden administration but is finding a friendlier environment under President Donald Trump.
“We are deeply grateful to Acting Chair Caroline Pham and the commission staff for recognizing the importance of PredictIt. Their diligence ensures the orderly expansion of prediction markets, allowing more Americans to participate in informed forecasting,” added Phillips.
The move also comes as the CFTC and the Department of Justice reportedly ended investigations into Polymarket.