Political prediction platform transforms into an exchange, expanding more prediction markets.

PredictIt has received approval from the CFTC to launch an expanded prediction market exchange, but has not yet disclosed specific details about the types of markets.

The prediction market PredictIt was initially an academic platform focused on political predictions, and after receiving approval from the U.S. Commodity Futures Trading Commission, it is preparing to launch a new exchange.

PredictIt, operated by Washington D.C.-based Aristotle, announced last week that the CFTC has approved its application to operate as a designated contract market (DCM) and a derivatives clearing organization (DCO).

"With these approvals, Aristotle will launch a new exchange that offers U.S. traders more diverse markets, deeper liquidity, and broader participation opportunities," the company stated in a press release last week.

PredictIt plans to expand into areas beyond political markets but has not disclosed the specific types of markets it will launch. "Market products will gradually expand like other DCMs," an Aristotle spokesperson told Decrypt, mentioning other regulated prediction markets such as Kalshi. "We are not currently disclosing any other specific details," the spokesperson added.

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The company stated that the platform has over 400,000 active users, but PredictIt has undergone a long journey to obtain these key approvals from U.S. regulators.

The platform was initially launched in 2014 as an academic real-money prediction market operated by Victoria University of Wellington in New Zealand. It is supported and operated by Aristotle, Inc., a political technology and data company based in Washington D.C., founded by John Aristotle Phillips in 1983.

Phillips is the CEO of Aristotle, Inc. Although there have been past questions about whether he held that title, a spokesperson has confirmed it.

In 2014, the company began launching the product after receiving a no-action letter from the CFTC, which allowed it to "operate a non-profit event contract market and offer event contracts to U.S. users without registering as a designated contract market, foreign trading commission, or swap execution facility, nor requiring registration for the operator."

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In simple terms, regulators stated that PredictIt could allow U.S. users to use its platform without applying for a DCM license, but the conditions were very limited and strictly regulated for non-profit purposes.

In August 2022, the CFTC rescinded its no-action letter, accusing PredictIt of violating the restrictions in the agreement. In the summer of 2023, an appellate court issued an injunction allowing PredictIt to continue operating during its legal battle with the CFTC.

Subsequently, in July of this year, PredictIt reached a settlement with the CFTC, allowing PredictIt to operate under the leadership of the Prediction Market Research Consortium, Inc., a U.S. non-profit organization that is applying for 501(c)(3) tax-exempt status with the IRS.

PredictIt faces increasing competition. Kalshi relaunched its election market in the U.S. after winning a lawsuit against the CFTC last year. Since then, it has continued to expand into sports markets, raising $185 million at a $2 billion valuation and hiring a new head of crypto business, with its trading volume accounting for more than half of the total prediction market volume. Meanwhile, Polymarket CEO Shayne Coplan stated that the company received a no-action letter from the CFTC after acquiring the licensed exchange QCX earlier this year, allowing it to operate its prediction markets in the U.S.

Prediction market Kalshi raises $185 million, valued at $2 billion

Prediction markets allow users to speculate and bet on the outcomes of future events. The markets allow users to sell their shares at any time, meaning investors can profit by buying and selling shares before the market resolves—without waiting for the market outcome.

However, doing so typically involves fees. For example, on the PredictIt platform, users who sell shares for profit must pay a 10% fee, while withdrawals incur a 5% fee.

Currently, one of the most active markets on PredictIt is the 2025 New York City mayoral election, which has seen 951,998 transactions to date, with Zohran Mamdani's winning probability reaching 81%. In the related market, users believe Andrew Cuomo has a 73% chance of placing second. However, the participation in this market is only 140,655 transactions. On the prediction market Myriad developed by Decrypt's parent company Dastan, users currently believe there is an 82% chance that Mamdani will become the next mayor of New York City.

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