Prediction market competition intensifies: PredictIt joins Kalshi, Polymarket battle
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Prediction market competition intensifies: PredictIt joins Kalshi, Polymarket battle
Political prediction platform transforms into an exchange, expanding into more prediction markets.
Navigating Web3 tides with focused insightsAuthor: Stacy Elliott
Translation: TechFlow
PredictIt has received approval from the CFTC to launch an expanded prediction market exchange, though specific details about the types of markets have not yet been disclosed.
Prediction market PredictIt, originally an academic platform focused on political predictions, is preparing to launch a new exchange after gaining approval from the U.S. Commodity Futures Trading Commission (CFTC).
PredictIt, operated by Washington, D.C.-based Aristotle, said last week that the CFTC had approved its application to operate as a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO).
"With these approvals, Aristotle will launch a new exchange offering U.S. traders more diverse markets, deeper liquidity, and broader participation opportunities," the company said in a press release last week.
PredictIt plans to expand beyond political markets, but has not revealed which specific types of markets it will introduce. "Market offerings will expand gradually, similar to other DCMs," a spokesperson for Aristotle told Decrypt, referencing other regulated prediction markets such as Kalshi. "We won't disclose further specifics at this time," the spokesperson added.
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The company said the platform now has over 400,000 active users, but PredictIt has endured a long journey to secure these key approvals from U.S. regulators.
The platform initially launched in 2014 as an academic real-money prediction market operated by Victoria University of Wellington in New Zealand. It was supported and operated by Aristotle, Inc., a Washington, D.C.-based political technology and data firm founded in 1983 by John Artistotle Phillips.
Phillips is the CEO of Aristotle, Inc. Although there had been questions in the past about whether he held that title, the spokesperson has confirmed it.
In 2014, the company launched the product after receiving a no-action letter from the U.S. Commodity Futures Trading Commission (CFTC), which allowed it "to operate a not-for-profit event contract market and offer event contracts to U.S. persons without registering as a Designated Contract Market, Foreign Board of Trade, or Swap Execution Facility, and without requiring registration of the operator."
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In simple terms, regulators stated that PredictIt could allow U.S. users to operate on its platform without applying for a DCM license, under very limited conditions and strictly on a non-profit basis.
In August 2022, the CFTC withdrew its no-action letter, accusing PredictIt of violating restrictions outlined in the agreement. In the summer of 2023, an appeals court issued an injunction allowing PredictIt to continue operating during its legal battle with the CFTC.
Subsequently, in July this year, PredictIt reached a settlement allowing PredictIt to operate under the Prediction Market Research Consortium, Inc., a U.S. nonprofit organization currently applying to the IRS for 501(c)(3) tax-exempt status.
PredictIt faces growing competition. Kalshi relaunched election markets in the U.S. after winning a lawsuit against the CFTC last year. Since then, it has expanded into sports markets, raising $185 million at a $2 billion valuation, hired a new head of crypto, and accounts for over half of total prediction market trading volume. Meanwhile, Polymarket CEO Shayne Coplan said the company received approval to operate its prediction markets in the U.S. after QCX, the licensed exchange it acquired earlier this year, received a no-action letter from the CFTC.
Prediction market Kalshi raises $185 million at $2 billion valuation
Prediction markets allow users to speculate and bet on the outcomes of future events. These markets let users sell their shares at any time, meaning investors can profit by buying and selling shares before a market resolves—without waiting for final results.
However, doing so usually involves fees. For example, on the PredictIt platform, users pay a 10% fee on profits from share sales, and a 5% fee when withdrawing funds.
Currently, one of the most active markets on PredictIt is the 2025 New York City mayoral election, which has seen 951,998 trades to date, with Zohran Mamdani having an 81% chance of winning. In a related market, users believe Andrew Cuomo has a 73% chance of placing second. However, participation in this market stands at only 140,655 trades. On Myriad, a prediction market developed by Dastan, Decrypt’s parent company, users currently assign an 82% probability to Mamdani becoming NYC’s next mayor.
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