PredictIt

PredictIt is a New Zealand-based online prediction market that offers exchanges on political and financial events.[1] PredictIt is owned and operated by Victoria University of Wellington[2] with support from Aristotle, Inc.[3] The market was launched on 3 November 2014.[1][4] PredictIt's office is located in Washington, D.C.[4]

PredictIt
PredictIt logo
Type of site
Prediction market
OwnerVictoria University of Wellington
URLwww.predictit.org
CommercialNo
RegistrationRequired for trading
Launched3 November 2014 (2014-11-03)
Current statusOperational

History

PredictIt was launched on 3 November 2014.[1] By March 2020, the website had approximately 100,000 active traders.[5] The nonprofit educational project of the Victoria University of Wellington, New Zealand, "had to work around federal laws that prohibit online gambling and govern commodity futures trading."[6] During the 2016 United States elections, PredictIt, along with other prediction market websites, received attention from various media outlets.[5][7][8]

Trading format

PredictIt uses a continuous double auction to sell shares for each event in its markets, meaning that for every person who predicts that an event will take place, there must be another person who predicts that it will not. The site groups related predictions into a market.[9] Operating expenses are covered by charging a fee of 10% on earnings in excess of the original investment and by charging an additional 5% withdrawal fee.[10]

Rules and limits

Victoria University of Wellington secured a no-action letter from the Commodity Futures Trading Commission,[11] eliminating the risk of prosecution for illegal online gambling.[12] In order to secure the no-action letter, each question is limited to 5,000 traders, and there is an $850 cap on individual investments per question.[2] These restrictions are modeled after the Iowa Electronic Markets, which previously secured a no-action letter from the Commodity Futures Trading Commission.[12] However, there are differences in the restrictions between the two markets.[11]

Data sharing program

PredictIt offers a data sharing program for members of the academic community. PredictIt has over 160 data partners, including researchers affiliated with the Massachusetts Institute of Technology, Harvard University, Yale University, Duke University, the University of Pennsylvania, the University of California, Berkeley, the University of Michigan, and the University of Virginia.[13]

Better Business Bureau Rating

As of January 2021, PredictIt has an F rating with the Better Business Bureau.[14]

See also
  • Intrade
  • iPredict – a New Zealand prediction market also run by Victoria University of Wellington; closed December 2016

References
  1. "New prediction market tabs Jeb Bush as frontrunner for 2016 GOP nomination". SaintPetersBlog. 2014-11-03. Retrieved 2015-01-25.
  2. "Terms And Conditions". PredictIt. Retrieved 2015-01-25.
  3. "What Is PredictIt?". PredictIt. Retrieved 2015-01-25.
  4. Patrick O'Connor (2015-08-21). "Online Exchange Shows Jeb Bush as the GOP's 2016 Favorite". The Wall Street Journal. Retrieved 2015-08-24.
  5. Jessica Contrera (2016-03-28). "Here's how to legally gamble on the 2016 race". The Wall Street Journal. Retrieved 2016-11-17.
  6. Bachman, Katy (2014-10-31). "Meet the 'stock market' for politics". Politico.com. Retrieved 2017-11-15.
  7. Andrew McGill (2016-05-11). "The People Who (Still) Bet Trump Won't Win the Nomination". The Atlantic. Retrieved 2016-11-17.
  8. Rory O'Connor (2016-02-18). "Something better than polls for political predictions? You bet!". PBS NewsHour. PBS. Retrieved 2016-11-17.
  9. "How It Works". PredictIt. Retrieved 2015-01-25.
  10. https://www.predictit.org/About/HowItWorks
  11. "CFTC Staff Provides No-Action Relief for Victoria University of Wellington, New Zealand, to Operate a Not-For-Profit Market for Event Contracts and to Offer Event Contracts to U.S. Persons". U.S. Commodity Futures Trading Commission. 2014-10-29. Retrieved 2015-01-25.
  12. Katy Bachman (2014-10-31). "Meet the 'stock market' for politics". Politico. Retrieved 2015-01-25.
  13. "Research Opportunities". PredictIt.org. Retrieved 2019-10-02.
  14. "Predict It | Complaints | Better Business Bureau® Profile". www.bbb.org. Retrieved 2021-01-06.
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