Between Intrade’s collapse and Kalshi’s rise, one platform kept legal, real-money political prediction markets alive in America: PredictIt. Deliberately small, awkwardly capped, and beloved by political obsessives, it ran as an academic experiment — until the regulator that permitted it tried to shut it down, and PredictIt fought back through the courts. It is one of the most consequential fights in the industry’s history.
The experiment: 2014–2022
PredictIt launched in 2014 under a CFTC no-action letter granted to Victoria University of Wellington in New Zealand: the agency agreed not to pursue enforcement provided the market stayed small and research-focused — famously capping positions at $850 per contract and limiting each market to 5,000 traders. Within those constraints it became the home of US political trading through the 2016 and 2020 cycles, generating a stream of academic research and a devoted community who prized its capped, whale-resistant structure. It was never big; it was never meant to be. It was proof that the product could exist lawfully.
The fight: 2022–2025
In August 2022 the CFTC abruptly withdrew the no-action letter, ordering the market wound down within months — and PredictIt sued, arguing the withdrawal was arbitrary and capricious. The Fifth Circuit granted a preliminary injunction keeping it alive in 2023, and litigation in the Western District of Texas ultimately went PredictIt’s way in 2025. The timing gave the case outsized significance: it ran in parallel with Kalshi’s landmark 2024 court win on election contracts, and together the two cases dismantled the CFTC’s resistance to political event markets. The scrappy academic experiment helped clear the road the whole industry now drives on.
Where it stands in 2026
PredictIt is still trading — its 2026 midterm markets are active — and it remains what it always was: a small-stakes, capped venue prized by political quants precisely because position limits mute the whale effects that can distort uncapped markets. It is a niche next to the giants’ volumes, but an influential one, and researchers still treat its capped prices as an unusually clean read of distributed political knowledge. For most traders today the practical venues are the big regulated exchanges in our 2026 rankings — but they exist in their current legal form partly because PredictIt went to court.
Why it matters
Three legacies. It bridged the gap: for eight years it was effectively the only lawful US political market. It generated the research: much of what we know about market accuracy versus polls comes from PredictIt data. And it won the argument: alongside Kalshi’s cases, its litigation established that regulators cannot simply will these markets out of existence. Not bad for an $850-cap experiment run for a university on the other side of the world.
More on how we got here
This page is part of our series on the story and scale of prediction markets:
Frequently asked questions
Is PredictIt still operating?
Yes. After winning its court fight over the CFTC's 2022 attempt to shut it down — including a 2025 ruling in its favour in the Western District of Texas — PredictIt continues to run its capped political markets, with 2026 midterm contracts actively trading.
Why does PredictIt have an $850 limit?
Its CFTC no-action letter permitted it as a small-scale academic experiment, with positions capped at $850 per contract and 5,000 traders per market. Those caps are also why researchers value it: they mute the whale effects that can distort uncapped markets.
What was the PredictIt lawsuit about?
In 2022 the CFTC withdrew the no-action letter that allowed PredictIt to operate and ordered it wound down. PredictIt sued, won a preliminary injunction at the Fifth Circuit in 2023, and prevailed in Texas federal court in 2025 — a key win for the whole industry.