CFTC Tells Political-Betting Site PredictIt to Close Out by Feb. 15, 2023

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The Commodity Futures Trading Commission has withdrawn the No-Action Letter issued to Victoria University of Wellington and under which PredictIt has operated since 2014.

Here is the CFTC press release:

Release Number 8567-22

CFTC Staff Withdraws No-Action Letter to Victoria University of Wellington, New Zealand Regarding a Not-For-Profit Market for Certain Event Contracts

August 04, 2022

Washington, D.C. — The Commodity Futures Trading Commission’s Division of Market Oversight (DMO) today announced it is withdrawing CFTC Letter No. 14-130 effective immediately. When DMO issued the letter on October 29, 2014, it took a no-action position with respect to the operation of a not-for-profit market for certain event contracts and the offering of such contracts to U.S. persons by Victoria University of Wellington, New Zealand without registration as a designated contract market, foreign board of trade, or swap execution facility, and without registration of its operators. [See CFTC Press Release No. 7047-14]

DMO has determined that Victoria University has not operated its market in compliance with the terms of the letter and as a result has withdrawn it. As stated in the withdrawal letter issued today, to the extent that Victoria University is operating any contract market in a manner consistent with each of the terms and conditions provided in CFTC Letter 14-130, all related and remaining listed contracts and positions comprising all associated open interest in such market should be closed out and/or liquidated no later than 11:59 p.m. (EDT) on February 15, 2023. [See CFTC Letter No. 22-08]

PredictIt has made the following announcement in response to the withdrawal:

  • 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.

“We know our PredictIt community is incredibly strong and committed to this project. If you want to respectfully comment on this action, you can submit your comments to the CFTC here.”

In November, former CFTC Commissioner Brian Quintenz was invited to join the Board of Directors of PredictIt’s rival Kalshi.

Kalshi bills itself as the “first CFTC-regulated exchange where you can trade directly on the outcome of events. Trade econ, politics, covid, etc.”