Written by :
Published on :
The popular political betting platform, which is at least partially based in the U.S., will be shutting down in Mid-February.
The website has been allowing customers to place bets and win money on political outcomes since its inception in 2014.
According to its Wikipedia page, Predictit is owned by a New Zealand firm but with support from Aristotle, Inc. The company's office is located in Washington, D.C. Only a limited number of U.S. states permit wagering on political outcomes. Some sites like BetOnline operate exclusively outside the U.S. with zero assets in the States. It also does not incorporate the trading model. BetOnline claims the 2020 U.S. Presidential election as its biggest non-sports moneymaker in the company's nearly 25 years existence.
Because PredictIt uses a trading platform to take real money wagers with the ability for customers to buy shares, The Commodity Futures Trading Commission seeks to shut the site down.
It is estimated that some 80,000 people use the site but it was unclear how many of those accounts are active.
A spokesperson of the Commodity Futures Trading Commission told the Washington Post the platform's growth drew their ire as PredictIt now violated certain terms pertaining to capped usage.
The CFTC submitted a letter to the business. PredictIt's parent company has filed a legal response.
The website posted its action plan publicly in the meantime:
- The security of trader funds will not be affected by this action
- We intend to continue operating existing markets for trading through Feb. 15, 2023 unless they resolve sooner under their respective market rules
- In light of this decision, we are halting the addition of new markets
- No determination has been made on how markets with end dates after Feb. 15 will be settled
- PredictIt will continue to accept deposits and new signups
- PredictIt will continue to honor all withdrawal requests
PredictIt maintains that all open markets are within the terms of the No-Action letter.
The No-Action letter notes that "participation in IEM is limited to 2000 total traders in any particular election for which a political market is operated, and to 1000 total trades in any particular economic indicator submarket. The University proposes to have a limit of 5000 total traders in any particular contract, explaining that broader participation would make these contracts more efficient and effective prediction tools. The University anticipates that the higher proposed cap on participation, coupled with a higher maximum deposit limit."
Gambling911.com will continue to monitor this matter and update where necessary.
- Gilbert Horowitz, Gambling911.com
