Smarkets vs PredictIt
| Attribute | Smarkets | PredictIt |
|---|---|---|
| Founded | 2008 | 2014 |
| HQ | London, United Kingdom | Washington, D.C., USA |
| Type | Low-Commission Betting & Prediction Exchange | Academic Political Prediction Market |
| Regulated | ✅ Yes (UK Gambling Commission / Malta Gaming Authority) | ✅ Yes (CFTC (Operating under Federal Court Injunction)) |
| Valuation | — | — |
| Status | Active | Active |
| Prestige | 86% | 58% |
Smarkets was founded in 2008 by former equities trader Jason Trost and software engineer Hunter Morris in London to disrupt legacy bookmakers with financial-grade exchange architecture. Built on Erlang-based event-driven matching infrastructure, Smarkets operates as an agile peer-to-peer prediction marketplace covering global sports, political elections, macroeconomics, and current affairs.
Distinguished by its industry-defining flat 2% commission structure on net market winnings, Smarkets offers unmatched liquidity and transparent order books. The exchange actively welcomes quantitative traders and high-volume market makers by maintaining transparent APIs and strictly prohibiting account restrictions or limits on winning traders.
Full profile: Smarkets →In November 2014, political technology veteran John Aristotle Phillips — famous in 1976 as the "A-Bomb Kid" who designed an atomic weapon from public documents while an undergraduate at Princeton — partnered with New Zealand's Victoria University of Wellington to launch PredictIt. Designed as a non-profit educational project, the exchange operated under a custom CFTC No-Action letter (14-130). This legal workaround allowed Americans to legally trade political futures by agreeing to strict research constraints: individual trades were capped at an $850 position limit per contract, and market participation was restricted to 5,000 active traders. While intended purely for academic data collection, the platform quickly became Washington's de facto real-money scoreboard, referenced daily across Capitol Hill and cable news.
The platform's existential crisis struck on August 4, 2022, when CFTC Chairman Rostin Behnam issued a sudden revocation letter ordering PredictIt to liquidate all open contracts and shut down operations by February 2023. Regulators claimed the platform had breached its academic terms, but provided no formal hearing or detailed evidence. Instead of complying, operator Aristotle Inc., alongside a coalition of political scientists and retail traders, filed a historic administrative law suit against the federal agency, Clarke v. CFTC. In July 2023, the U.S. Court of Appeals for the Fifth Circuit issued a landmark ruling halting the shutdown, explicitly characterizing the CFTC's sudden enforcement action as arbitrary, capricious, and unlawful administrative overreach.
Full profile: PredictIt →