Is PredictIt Legal? Full PredictIt Review & How It Works
PredictIt is an online political prediction market exclusive to U.S. citizens. Launched in 2014, the platform lets users forecast local and global political events by buying shares on the site with real money.
Last year, PredictIt reported having over 400,000 active users, and the site continues to attract political junkies and traders who want to test their knowledge of current events. It also provides its data to academic partners and organizations worldwide, promoting better research into political behavior, economics, and other fields.
This PredictIt review examines the platform’s legal status and explains how the prediction market operates. We’ve also included a pros-and-cons section and outlined the risks of trading on the site.
A prediction market allows people to trade contracts tied to the outcomes of future events. Users buy and sell these contracts, whose prices reflect the crowd’s collective belief in the likelihood of the event being traded. The Victoria University of Wellington in New Zealand owns the PredictIt platform, which it launched on November 3, 2014. It released the site as a nonprofit educational project with a data-sharing program for faculty across numerous academic institutions, including Harvard University, the University of Cambridge, and the Massachusetts Institute of Technology. When you use PredictIt, you are not betting against the platform (the house) as you would on sportsbooks or gambling sites. You trade with other users, and the platform merely facilitates the exchange. Additionally, PredictIt contract prices are set by supply and demand. Users can trade contracts on the U.S. elections, political control of Congress, policy outcomes, approval ratings, and polling benchmarks. Once the event is resolved, only the correct outcome pays out: Contracts can be bought for as little as $0.01 but never more than $0.99. If a contract is correct, it pays out $1, so the most you could ever make is $0.99 per share before fees — and only if you bought at the lowest price. Given these mechanics, PredictIt converts participants’ predictions into live share prices. In turn, those prices reflect the implied probability that people believe an event will occur. So, if a “Yes” contract is priced at $0.80, it implies an 80% probability of the event occurring. PredictIt uses a continuous double-auction (CDA) system that allows traders to submit buy or sell orders at any time. When a buyer’s price matches a seller’s price (for both “Yes” and “No shares), an exchange automatically occurs. For example, a trader wants to buy a “No” contract at $0.45. If a “No” contract seller also bids $0.45, PredictIt matches the two orders, and a trade is made at $0.45. Notably, traders don’t need to wait for the event to settle to earn from their shares. At any point while the market is live, they can sell their shares or buy more. Therefore, share prices will change over time as beliefs shift in response to new information. Breaking news and new candidate polls can often reveal information that traders didn’t know before. Market sentiment can also affect prices: excitement can drive buying sprees, while fear can lead to sell-offs. PredictIt only charges fees when users sell shares to make a profit and withdraw money from their accounts. Let’s break down these costs: Furthermore, investments in any individual contract at any given time are capped at $3,500 per user. Share purchases are limited to the amount of funds a user has, and users can’t sell more shares than they own. Compared with other top prediction markets, PredictIt’s fees are relatively high. For instance, Polymarket fees apply only to specific short-term crypto markets; most contracts on the platform are fee-free. Meanwhile, the Kalshi prediction market exchange charges only a 2% fee on debit card deposits and a flat $2 fee for debit withdrawals. With the combined PredictIt profit and withdrawal fees, participants may find it more difficult to earn and grow their money on the platform. Since the platform primarily serves an academic purpose, user profitability is not a high priority, and the higher fees help the site better maintain operations. Users can fund their PredictIt accounts by making deposits with the following methods: Withdrawals are supported through ACH bank transfer or mailed paper checks. All deposited funds are subject to a 30-day holding period before withdrawal. After a bank withdrawal has been successfully processed, it may take the typical few business days (2-5 days) for the funds to reach users’ accounts. Most traders should be able to deposit and withdraw funds from the platform with ease, especially since PredictIt supports the most popular payment channels in the country. The 30-day holding period after the initial deposit is likely the most important aspect to keep in mind. Before PredictIt launched in 2014, it was granted a no-action letter from the Commodity Futures Trading Commission (CFTC). The letter required the platform to limit each market to 5,000 traders and limit individual investments to $850 per contract. In 2022, the CFTC attempted to revoke the no-action relief, arguing that the online prediction market no longer complied with the letter’s conditions. The case went through multiple rounds, but PredictIt was allowed to continue operating throughout the litigation. Eventually, the CFTC lost the dispute, and in September 2025, PredictIt had secured full regulatory approval to operate from the CFTC. The platform is now considered a designated contract market (DCM) and a derivatives clearing organization (DCO) under the government agency. Currently, any U.S. resident aged 18 or above can legally access PredictIt and all its prediction market features. Since it continues to follow the CFTC’s no-action letter, the platform sets a $3,500 investment limit per participant for any contract. In contrast, offshore betting sites are considered gambling platforms and are riskier as they lack U.S. legal protections. PredictIt’s operations hinge on a unique legal exemption that is not necessarily permanent. The CFTC or other government institutions may modify or revoke the exemption in the future, which could raise concerns among its long-term participants. While the platform faced regulatory scrutiny from the CFTC for years, PredictIt now operates under special academic research conditions, with certain settlement rules and trading limits in place. Its win in the legal battle against the CFTC has helped clarify its position as a prediction market for educational purposes, not an unlicensed betting site. Because PredictIt is subject to U.S. regulatory requirements, it follows secure frameworks for handling users’ funds. New accounts must complete identity verification, which includes location and tax details. Furthermore, the platform adheres to various anti-money laundering (AML) rules as a DCM and DCO in the country. Every tradeable prediction event on PredictIt includes published rules that describe the exact conditions for the market to resolve. The platform makes it clear that it resolves markets solely on the basis of the stated rules and that its resolution reviews are based on publicly available, verifiable information. Traders can also speculate on candidate nominations, predicting which particular candidates will secure their party’s nomination during election season. Outcomes for candidate nomination markets typically unfold over months and can change, allowing PredictIt users to trade on resulting share price fluctuations. Policy and legislative events are other popular markets that cover outcomes such as whether certain bills will pass, a regulatory action will be finalized, or an appointment will be confirmed. A couple of polling and approval rating markets also come up, offering a glimpse into public sentiment regarding public officials and other political figures. Participants trade markets with different strategies, depending on their time horizon and risk tolerance. Some open long-term positions based on conviction on a candidate or policy outcome and hold until resolution. Others look for short-term opportunities by making quick trades following the latest developments, polling data, and other breaking news. It’s also possible that some traders use PredictIt to hedge their political opinions. For example, a user favoring a Republican candidate might buy shares in an opposing Democratic candidate to offset the disappointment if the Democratic candidate wins. 🟢 Pros 🔴 Cons Ideal users include: PredictIt is not like traditional gambling or crypto betting sites. Thus, bonus hunters and casual gamblers may not benefit from trading on the platform. As an educational project, PredictIt does not offer bonuses, boosts, or entertainment features to optimize for a more gaming experience, unlike popular online gambling sites. Visit PredictIt and click the sign-up button. Create an account by connecting a Facebook or X account. The platform also supports email registration. Once registered, PredictIt requires members to provide their full name, date of birth, home address, and tax information to verify their account. Head to the deposit page to add funds. Select a funding method and enter the necessary payment details. Click “Review and Confirm” and wait for the confirmation. Total cash funds available for trading can be viewed on the navigation bar. PredictIt displays all available markets on its homepage, and traders can search for specific contracts using the search bar. Users can also sort markets by keywords or categories such as elections, president, congress, state/local, and world events. Read the rules of each market to understand the criteria PredictIt will use to determine the outcomes. Click a market to trade and decide whether to be in favor (Yes) or against (No) the outcome. Choose a contract to buy, then enter the maximum price and the number of shares to purchase. Click “Next” and review the order. Confirm the transaction by clicking “Submit Offer.” If shares are currently being sold at the offer’s maximum price, PredictIt will match the transaction and complete the buy order. When selling shares, head to the same market and select the sell option. Set a minimum sell price and the number of shares to sell. Click “Next” and confirm the order by clicking “Submit Offer.” Another way to exit a position is to wait until PredictIt closes the market and settles all contracts. Once conditions are met, the platform typically completes a review within 48 hours and redeems each winning share automatically for $1.00. All other shares are forfeit. Here’s a full trade walkthrough example for PredictIt “Who will win the 2028 US presidential election?” market: However, the platform’s non-profit status requires PredictIt to impose trading limits ($3,500 per individual per contract) and higher fees than those of other prediction marketplaces. Users who value the platform’s educational features and want to test their political forecasting skills while complying with U.S. regulatory requirements may find PredictIt highly appealing. Meanwhile, users who prioritize lower fees, entertainment value, or bonus incentives may be better served by other platforms, such as Polymarket.
Platform Overview: What Is PredictIt?
PredictIt is a regulated prediction market where users buy and sell shares on political and public policy outcomes. If their prediction comes true in the real world, they earn money.How Does PredictIt Work?
When PredictIt opens a market, participants can buy or sell “Yes” or “No” contracts, each priced between $0.01 and $0.99 per share. The price reflects the market’s belief about the outcome: a higher “Yes” price suggests traders think the event is more likely to happen, while a higher “No” price suggests the opposite.
Fees, Limits, and Costs
Deposits and Withdrawals
Is PredictIt Legal?
PredictIt is legal in the U.S. as a prediction market under a special academic research exemption. Despite other real-money prediction markets being restricted in the country, PredictIt can legally operate as a project of the Prediction Market Research Consortium, a non-profit organization for academic purposes.
Is PredictIt Legit and Safe?
By the time prediction markets took center stage in the U.S., PredictIt had already been operating for a decade. Since 2014, it has become a recognizable platform for political event trading and currently houses over 400,000 active traders.PredictIt Markets and Popular Use Cases
PredictIt’s most active markets are centered around the U.S. electoral politics. Many contracts are on who will win presidential, gubernatorial, and congressional races, while a few mayoral elections are also available. Some markets focus on party control (Democratic or Republican), such as the “Who will control the Senate after 2026?”
PredictIt Pros and Cons
In this section of our PredictIt review, we break down the platform’s main advantages and drawbacks that users should be aware of.
Who Should (and Shouldn’t) Use PredictIt?
Based on our analysis, PredictIt is best suited for politically engaged users who often stay up to date on events and hold deeply analytical perspectives.
How to Use PredictIt: Step-by-Step
Here is a simple walkthrough of how to use PredictIt.Step 1: Create an Account
Step 2: Deposit Funds
Step 3: Browse Markets
Step 4: Buy Shares
Step 5: Exit Your Position
Full Example Trade Walkthrough
Final Verdict: Is PredictIt Worth It?
PredictIt operates under a special academic exemption, making it a unique prediction market platform that focuses on education, transparency, and data sharing. It’s a fully legal platform that has partnered with various research organizations, showcasing its academic credibility.FAQs
Is PredictIt gambling?
Can you really make money on PredictIt?
Why are PredictIt fees so high?
Is PredictIt available in all states?
Are PredictIt markets accurate?
What happens if a market is disputed?
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