Before Kalshi and Polymarket became household names, there was PredictIt. Launched in 2014 as an academic project, it was the original real-money prediction market in the United States, and for a decade it was the main place Americans could legally trade on political outcomes. It survived a near-fatal fight with federal regulators, but the world around it has changed dramatically.
Understanding what PredictIt is, and how it stacks up against the platforms that followed, tells you whether it still deserves a place in your rotation. Smart Bet Insider tracks prediction markets and how they work. The sections below cover what PredictIt is, how it trades, its fees, its legal saga, how it compares to newer rivals, its markets, and where it fits today.
What PredictIt Is
PredictIt is a real-money prediction market focused almost entirely on politics, launched in 2014 as a project of a nonprofit research consortium tied to New Zealand’s Victoria University of Wellington and operated by the political software company Aristotle. It runs under a CFTC no-action letter rather than a full exchange license, a framework built around its academic, research-oriented purpose.
The product is narrow by design. Users trade Yes or No shares on political questions, priced anywhere from one cent to 99 cents, with each winning share settling at a dollar. Only US residents aged 18 and older can participate, which has kept PredictIt a distinctly domestic, politics-first platform since its earliest days.
How Trading Works
Trading works much like a simplified stock exchange. You buy shares in a specific outcome, such as a candidate winning an election, and the share price reflects the market’s implied probability of that outcome, so a contract at 60 cents signals a 60% chance in the market’s collective view.
Prices move as traders buy and sell, and you can exit a position before the event resolves by selling your shares at the current price. If your prediction is correct at resolution, each share pays out a dollar, and if it is wrong, the shares expire worthless, the same binary structure that defines prediction markets broadly.
The Fees and Limits
Fees are the feature that most defines, and most limits, PredictIt. The platform charges 10% on the profits from winning trades and another 5% when you withdraw funds, which stacks into an effective cost load around 15%, the highest of any major prediction market. Those fees eat meaningfully into returns, especially for active traders.
Position limits are the other constraint. PredictIt historically capped each trader at $850 per contract, a restriction tied to its research framework, though that ceiling was raised to $3,500 as part of its 2025 regulatory resolution. The small caps create quirky pricing, since large traders cannot move a market the way they could elsewhere.
The CFTC Legal Saga
PredictIt’s survival is a genuine legal drama. In August 2022, the CFTC withdrew its no-action letter and ordered the platform to wind down, threatening to end it entirely. PredictIt and its traders sued, and the Fifth Circuit intervened to keep the market open while the case proceeded.
The courts ultimately sided with PredictIt. The Fifth Circuit’s ruling that a no-action letter functioned as a reviewable license carried implications beyond the CFTC for how agencies use such letters, and in July 2025 PredictIt announced the favorable resolution of its nearly three-year fight, with the withdrawal vacated and its operating terms amended and loosened.
How It Compares to Kalshi and Polymarket
The contrast with the newer giants is stark. Kalshi and Polymarket both operate as CFTC-registered Designated Contract Markets, a fuller regulatory status than PredictIt’s no-action framework, and both offer far broader markets, deeper liquidity, higher or no position limits, and dramatically lower fees.
PredictIt simply cannot match that scale. Where Kalshi spans politics, economics, and sports and Polymarket adds crypto and culture, PredictIt stays locked on politics, with an older interface and its distinctive fee load. In raw breadth and cost, the platform it pioneered has been surpassed by the ones it inspired.
The Markets You Can Trade
What PredictIt still does well is political depth. Its markets cover elections, primaries, nominations, confirmations, legislative outcomes, and political appointments, often reaching down-ballot races and niche political questions that broader platforms overlook in favor of higher-volume events.
That specialization is its remaining edge. A political junkie can find granular contracts on PredictIt that simply do not exist elsewhere, backed by more than a decade of pricing history. What you will not find is anything beyond politics, since sports, economics, and culture markets are outside its scope.
Where PredictIt Fits Now
Today PredictIt occupies a small but distinct corner of the market. It is no longer the only option or even a leading one, but it remains a specialist tool for political forecasting, valued for its track record, its academic pedigree, and its unusually deep political coverage rather than its size or convenience.
The trade-off is real. Its high fees, low limits, dated experience, and politics-only scope make it a hard sell for anyone chasing scale or variety, so it functions best as a supplement for dedicated political traders rather than a primary platform.
Is PredictIt Worth Using?
For political forecasting enthusiasts who value unique down-ballot markets and a long pricing history, PredictIt is still worth a spot, provided you can accept the steep fees and modest limits. For everyone else, Kalshi and Polymarket offer more markets, lower costs, and greater scale.
Smart Bet Insider tracks prediction markets and how they work as the field consolidates around larger platforms. Weigh PredictIt’s fees against its unique political coverage before committing, and treat any position as speculative rather than a sure thing. None of this is financial advice, and anyone trading should be 18 or older and stay within a budget they can afford to lose.
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Frequently Asked Questions
Is PredictIt legit and legal?
Yes. PredictIt is a legitimate, US-based prediction market that has operated since 2014 under a CFTC no-action letter. It survived a legal battle with the CFTC that was resolved in its favor in July 2025. It is legal for eligible US residents aged 18 and older.
What are PredictIt’s fees?
PredictIt charges 10% on the profits from winning trades and 5% on withdrawals, an effective cost load of roughly 15%. That makes it the most expensive of the major prediction markets. The fees are collected at resolution and when you withdraw funds.
What can you trade on PredictIt?
PredictIt focuses on politics, offering Yes/No contracts on elections, primaries, nominations, confirmations, and legislative and policy outcomes. It provides unusually deep coverage of down-ballot and niche political questions. It does not offer sports, economics, or culture markets.
How is PredictIt different from Kalshi?
Kalshi operates as a CFTC-registered Designated Contract Market with broad markets, deeper liquidity, higher limits, and lower fees. PredictIt runs under a narrower no-action letter, focuses only on politics, caps positions per contract, and charges higher fees. Kalshi is far larger and broader; PredictIt is a political specialist.
What happened in PredictIt’s fight with the CFTC?
In 2022, the CFTC withdrew PredictIt’s no-action letter and ordered it to shut down. PredictIt sued, the Fifth Circuit kept it operating, and in July 2025 a court vacated the withdrawal as arbitrary and capricious. The resolution kept PredictIt open and loosened some of its trading limits.