PredictIt, the long-running political prediction market run by D.C.-based Aristotle, has received key approvals from the CFTC to operate as a designated contract market (DCM) and a derivatives clearing organization (DCO). Aristotle says it will use these permissions to launch a new exchange aimed at delivering deeper liquidity and more diverse markets for U.S. traders.
The platform — which traces its roots to a 2014 academic project run by Victoria University of Wellington — has grown to more than 400,000 active users. PredictIt’s path to approval was rocky: the CFTC granted a limited no-action letter at launch, revoked it in August 2022, and after court fights the site reached a July settlement that placed operations under the Prediction Market Research Consortium, Inc., a U.S. not-for-profit pursuing 501(c)(3) status.
Aristotle says the new exchange will expand beyond political contracts, though it has not yet published a list of proposed markets. The move puts PredictIt directly in competition with regulated platforms such as Kalshi — which relaunched U.S. election markets, expanded into sports, raised $185 million at a reported $2 billion valuation and now handles a large share of prediction-market volume — and crypto-native players like Polymarket that have sought U.S. operating paths via acquisitions and no-action letters.
For readers new to prediction markets: participants buy and sell contract shares representing an event outcome. Positions can be closed before resolution, and platforms charge fees on profits and withdrawals — PredictIt currently takes a 10% fee on profitable sales and a 5% withdrawal fee.
Why it matters: a regulated DCM/DCO could broaden institutional and retail participation and unlock larger markets and liquidity. At the same time, traders should note ongoing regulatory scrutiny and platform fees can materially affect returns.
Source: Decrypt. Read the original coverage for full details.
