By judgment of the Commodity Futures Trading Commission, PredictIt, an online betting platform that provides gambling choices on U.S. political outcomes such as elections, will no longer be allowed to operate lawfully in the nation (CFTC).

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PredictIt to Continue Operations Until 2023

The CFTC withdrew the regulatory letter and overturned its prior grant of permission on Thursday, stating that the website was no longer “a small-scale, non-profit, online market for event contracts in the United States for educational purposes.”

PredictIt, which limits wagers to $850, denied the assertion. Since 2014, PredictIt has used the research clearance provided to Victoria University of Wellington in New Zealand to allow Americans to wager on US elections, which is typically prohibited.

Bloomberg writes that PredictIt’s concentration on politics propelled it to the forefront of a new asset class that facilitates wagering on the outcomes of real-world events via derivatives. Aristotle Inc., which offers technology, analytics, and other services to political campaigns, operates PredictIt.

The CFTC said that PredictIt trading in contracts designated under the legal interpretation of 2014 must cease by February 15, 2023. The regulator’s decision did not entail enforcement. Bloomberg reported that as of Friday afternoon in Washington, traders could still use PredictIt to wager on everything from whether former President Donald Trump or Florida Governor Ron DeSantis will win the 2024 presidential election to whether Alexandria Ocasio-Cortez will file to run for president before 2024.

The letter authorized the institution to list the items for academic and research reasons. As a result of PredictIt’s association with the university, the platform was never registered with the CFTC as a derivatives exchange, a cumbersome procedure involving intensive regulatory scrutiny. PredictIt indicated it disagreed with the agency’s decision and “maintains that all active markets are not only compatible with the provisions of the no-action letter but also with commission interpretations communicated to them over the last eight years.

Press Release Statements 

Margaret Hyland, vice-provost of Victoria University of Wellington, said in a separate statement that the platform has not yet resolved how contracts with expiry dates beyond February 15 would be paid. Victoria University of Wellington said in a statement that PredictIt “remains a university initiative managed by Aristotle.” The university has not sold anything to Aristotle.”

The West Virginia Lottery, which oversees gambling in the state, initially approved a plan in April 2020 to become the first state in the United States to allow gambling on politics and allow FanDuel and other sportsbooks to offer political wagers, but required additional time “to fully work through the implications and conduct additional research. FanDuel had began accepting wagers on the 2020 presidential election earlier in the day, believing it had obtained the necessary clearance. However, after around forty minutes, it suspended wagering and reimbursed consumers’ funds.