PredictIt wins first bout as legal battle set to go to the wire
CTFC denied motion to dismiss political betting site suit over enforced closure with full appeal hearing looming
PredictIt, the embattled political betting site facing closure next month, has won the latest leg of its duel with the Commodity Futures Trading Commission (CTFC) as the dispute spills over into 2023.
The victory came after justices at the Fifth Circuit Court of Appeals for the Western District of Texas denied a motion by the CTFC to quash a lawsuit filed by PredictIt seeking to keep its political betting exchange market operational beyond an enforced CTFC deadline of February 15.
Grounds for the CTFC’s motion relate to a lack of enforceable jurisdiction for the case, arguing that the case should be transferred to Washington DC rather than Texas, after a recommendation was made in November.
While the case was transferred, CTFC’s motion to dismiss was in turn dismissed by judges, with the PredictIt appeal being expedited to the next available merits panel.
However, the victory didn’t go all PredictIt’s way in that no ruling on its injunction seeking to allow it to stay open beyond the deadline of February 15 was made.
Instead, the court issued a revised briefing schedule on the PredictIt appeal, a timetable which will see the case debated right up to a week before the deadline.
Plaintiffs on the case (PredictIt) will brief the court on January 25, with the CTFC providing its briefs to the court on February 1, before PredictIt is given right to reply to the CTFC’s oral arguments.
While there is no guarantee the court will rule before the February 15 deadline, the scheduling of the appeal hearings indicate a favorable stance towards making a decision on the case as quickly as possible.
Based in New Zealand, PredictIt offers Americans the chance to browse a variety of political markets and bet on whether an event will or will not happen by purchasing a ‘share’ in that event. It also allows trading on shares in different events between users with all purchases/bets capped at $850.
PredictIt operates on a prior CTFC permission first given in 2014, which has been allocated to the Victoria University of Wellington, with all betting supposed to take place under the condition that it operates on a non-profit basis and purely for research purposes.
The site allows quasi-wagering on political events and had become popular among US broadcasters in the run-up to political events such as the US Senate and Presidential elections.
In August, PredictIt was ordered to cease operation in the US by the CTFC following the withdrawal of a no-action letter by the US watchdog.
The enforced closure of the site will lead to the liquidation of many markets, including those concerning the 2024 US elections, something which PredictIt and its backer Aristotle International Inc have fiercely opposed.
The case rests on 75 existing markets, which would not expire by the CTFC deadline date, with more than 14,500 so-called ‘traders’ operating contracts in markets affected.