Ask anyone who followed politics in the 2000s where you checked the “odds” on an election, and the answer was Intrade. The Dublin-based exchange was the first prediction market to break into mainstream consciousness — quoted on cable news, cited by academics, watched obsessively on election nights. And then, in early 2013, it was gone. Its story is the essential cautionary tale of this industry, and the reason today’s platforms look the way they do.
The rise: 2001–2012
Founded in Ireland around the turn of the millennium and run as a real-money exchange, Intrade let users worldwide trade binary contracts on elections, current events, entertainment and more — recognisably the same product Kalshi and Polymarket offer today. Its US election markets made it famous: through the 2004, 2008 and 2012 cycles its prices were treated as a live probability read on the race, often discussed alongside — and sometimes against — the polls. For a generation of economists and political scientists, Intrade was the proof-of-concept that markets could aggregate political information.
The fall: 2012–2013
The end came in two blows. In November 2012, the CFTC sued Intrade for offering commodity-option-style contracts to US customers without registration, and the site immediately barred Americans — the bulk of its user base. Then in March 2013 Intrade abruptly halted all trading, freezing accounts after announcing it had discovered financial irregularities; investigations pointed to unexplained shortfalls in member funds intertwined with payments linked to its late founder. The exchange never reopened, and the world’s most famous prediction market simply ceased to exist.
What went wrong
Intrade’s collapse taught the industry three lessons that define it today. First, regulation is existential: operating outside the US regulatory perimeter worked until it abruptly did not — which is why Kalshi’s founding bet was to become a CFTC-designated exchange before listing a single market. Second, custody matters: Intrade held customer money with weak controls, exactly the failure regulated clearing and segregation now guard against. Third, trust is the product: a prediction market sells confidence that contracts pay out; the moment that broke, there was nothing left. Our guide to platform safety is essentially a checklist built from this failure.
The legacy
For all the mess of its ending, Intrade proved the demand and the concept — its election prices were often impressively accurate, and the appetite it revealed never went away. When the PredictIt experiment picked up the torch in 2014 and Kalshi won regulated status in 2020, both were consciously building what Intrade should have been. Today’s $24-billion-a-month market is Intrade’s vindication, achieved the way it never managed: inside the rules.
More on how we got here
This page is part of our series on the story and scale of prediction markets:
Frequently asked questions
Why did Intrade shut down?
Two blows in quick succession: a November 2012 CFTC lawsuit forced it to bar US customers, and in March 2013 it froze all trading after discovering financial irregularities in member funds. It never reopened.
Was Intrade legal?
Not for US customers, as it turned out — the CFTC sued it for offering unregistered commodity-option-style contracts to Americans. That case is precisely why today's US platforms operate as CFTC-designated exchanges.
What replaced Intrade?
PredictIt launched in 2014 as an academic, no-action-letter experiment, and Kalshi became the first fully CFTC-regulated event exchange in 2020. Polymarket built the crypto-native version. Together they are Intrade's successors at vastly greater scale.