PredictIt Gains Official Approval to Operate as a Regulated Exchange

PredictIt Receives Regulated Exchange and Clearinghouse Approval

The Commodity Futures Trading Commission (CFTC) has officially approved PredictIt to function as a regulated derivatives exchange and clearinghouse. This significant development marks the conclusion of years of regulatory challenges for the platform and sets the stage for its next phase of growth.

New Dual Licenses Enable PredictIt to Expand Political Market Offerings

PredictIt, a platform known for allowing users to trade contracts related to political outcomes, will now operate under the same regulatory framework as established platforms like Kalshi and Polymarket. Its parent company, Aristotle, announced plans to launch the newly approved exchange as soon as October.

This approval follows a long legal struggle between PredictIt and federal regulators. Previously, PredictIt operated under a “no-action” agreement that exempted it from certain enforcement actions, provided it stayed educational and limited trade sizes. However, in 2022, the CFTC canceled this agreement, citing rule violations by PredictIt, which led to a prolonged legal battle. Earlier this year, PredictIt prevailed in court, clearing the way to pursue formal licensing.

With its dual status as a Designated Contract Market and a Derivatives Clearing Organization, Aristotle can now run a fully regulated prediction market in the U.S. Executives highlighted that this status promotes increased transparency and security, while also enabling future growth opportunities. CEO John Aristotle Phillips described the approval as a chance to deliver better, more accessible prediction markets, leveraging over a decade of experience.

Shifting Regulations May Allow PredictIt to Broaden Its Market Beyond Politics

This regulatory progress coincides with a broader shift in Washington’s stance on event-based trading platforms. The current CFTC leadership appears more open to licensing platforms that facilitate wagering on various topics such as elections and economic indicators. For instance, Polymarket successfully navigated regulatory reviews and regained permission to operate in the U.S.

For PredictIt, this means lifting previous restrictions on trade sizes and user activity. While the company has hinted at plans to expand beyond its current suite of approximately two dozen political contracts, specific features and new markets have yet to be announced.

Additionally, a nonprofit research organization is expected to oversee PredictIt’s new governance model, helping to maintain the balance between public involvement and academic research. With over 400,000 users, the platform’s community views this regulatory victory as both a legal and operational success. As Aristotle prepares to launch the regulated exchange shortly, its focus remains on competing with other licensed derivatives platforms while strengthening its leadership in political forecasting.