PredictIt

PredictIt is an online prediction market platform focused on political events. It allows users to buy and sell shares in contracts that pay out $1 if a specific outcome occurs (e.g., a particular candidate winning an election) and $0 if it does not. The price of a share represents the market's aggregated prediction of the likelihood of that outcome.

Operated by Victoria University of Wellington (New Zealand), PredictIt received a "no-action" letter from the Commodity Futures Trading Commission (CFTC) in 2014, which allowed it to operate under certain conditions, including limiting the number of traders per market to 5,000 and capping individual investments at $850 per contract.

The platform serves as a research tool for academics and others interested in public opinion and forecasting. It offers real-time data on market sentiment regarding political races, policy decisions, and other newsworthy events. The accuracy of PredictIt's forecasts has been studied and debated, with some research suggesting it provides useful insights, while other analyses raise concerns about potential biases and limitations.

In August 2022, the CFTC withdrew its no-action letter, requiring PredictIt to wind down operations by February 15, 2023. PredictIt unsuccessfully challenged this decision in court, and the platform ceased trading on that date. While existing contracts were settled based on their outcomes, no new markets can be created. The future of PredictIt and similar political prediction markets remains uncertain, subject to regulatory changes and potential challenges to their legality.