PredictIt, one of the most popular prediction markets, has been ordered by the Commodity Futures Trading Commission (CFTC) to shut down as it failed to comply with the terms of a no-action letter. The political gaming platform, which has been operating in the US since 2014, has to cease operations by next February.
PredictIt has been touted as the leading platform for individuals to bet on the outcome of American elections. It operated under a research license given by the Victoria University of Wellington in New Zealand. The platform caps wagers at $850 and given its academic roots, mainstream media has always cited PredictIt odds. Its official portal states that PredictIt is an experimental project operated for academic purposes under permission from the CFTC.
In regards to the closure, the CFTC hasn’t given any specific reason. The agency claimed that the entity had not operated its market in compliance with the terms of its license. Experts say this may be PredictIt’s failure to register with the CFTC as a derivatives exchange. But PredictIt disagrees with the agency’s ruling. It claims that the platform is fully compliant with the rules. PredictIt, in a statement, said it will carry out normal operations till the deadline. However, it is unclear how the platform intends to settle contracts after Feb 15.
