How does PredictIt Work? Is it Legal?
Your Expert Guide for 2020

How does PredictIt work?

Predictit.org operates as a political futures exchange of sorts, offering a series of markets to predict outcomes around current political events.

If you’re looking for a guide to get you betting in no time, you’ve come to the right place. My hope is to provide the tutorial that I wish I had when I was just starting out on PredictIt myself. Let’s get started!

Each market on PredictIt is segmented into contracts, consisting of binary “Yes” and “No” options. Buying a “Yes” option means you expect the outcome to come true. Buying “No” indicates the opposite.

Here is an example of the 2020 presidential election market:

The market here is “Who will win the 2020 U.S. presidential election?”

We see five contracts as follows: Joe Biden, Donald Trump, Kamala Harris, Elizabeth Warren, Cory Booker.

You have the option to “Buy Yes” or “Buy No” on each contract. You can buy shares in multiple contracts, if you’d like.

The share price is specified next to the contract. You may decide to buy multiple shares of the same contract at a certain price, depending on what the market is offering at the time.

When it comes time to for the outcome to resolve, PredictIt will determine which of the Yes and No contracts have predicted the outcome correctly, and pay out $1 for each of these shares.

All incorrect shares get redeemed for $0 each, meaning you will lose whatever sum you have originally paid for these.

Usually, only one contract will see its “Yes” shares pay out, while the rest see their “No”s pay out. PredictIt will determine this against criteria it defines in the Rules section of the market.

That should give you a good start. I link to some articles to help you further your knowledge at the bottom of this page, but first, let me quickly touch on the legality of PredictIt.

Is PredictIt legal?

PredictIt is run as a data collection project by Victoria University in Wellington, New Zealand, for the purpose of researching political sentiments.

While the legality of betting online in the United States, at the time of writing, is still questionable, you’ll be delighted to find out PredictIt is a 100% legal, safe, and legitimate website.

PredictIt’s non-profit status has allowed it to operate legally by obtaining a no-action letter from the CFTC, the U.S. agency in charge of regulating online betting.

For this reason, wagering on the site has certain restrictions, such as an $850 maximum bet limit per market. The creation of certain market types, such as tweets, have been regulated at times.

But as of the time of writing, there is still plenty of money to be made on this site, whether you’re a beginner or expert. Anyone can profit easily, but the more effort you put in, the greater winnings you take home.

Also, if you’re like me, the financial incentive provides a great way to keep yourself engaged in politics. At the end of the day, it is simply a lot of fun.

For more specific detail on limits, fees, site mechanics, and the like, I suggest continuing the tutorial below.

Continue the tutorial

Let’s take a closer look at how markets work on PredictIt. Check out the following articles to keep going:

Become a market wizard: How Markets Work in PredictIt

Learn the mechanics of betting: Buying and Selling Shares in PredictIt

February 16, 2020

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3 thoughts on “How does PredictIt work? Is it Legal? Your Expert Guide for 2020”

barry_rice03
February 26, 2020 at 9:25 pm

hey great articles man. Do you know if theres a minimum deposit amount on the site?

Reply
1. Kalog
  February 27, 2020 at 8:36 am
  
  Thanks, I appreciate that! Yes, there’s a $10 minimum deposit.
  
  Reply
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How does PredictIt Work? Is it Legal?
Your Expert Guide for 2020