The wagering platform known as PredictIt has found itself embroiled in a court case for a prolonged period of time. This after the Commodity Futures Trading Commission (CFTC) mandated it to cease its operations in the previous summer. PredictIt retorted by instigating a lawsuit, which is still ongoing. However, recent documents submitted to the US Fifth Circuit Court of Appeals suggests that PredictIt has a possibility of winning its legal dispute against the CFTC.
In 2014, Wellington’s Victoria University was able to obtain a no-action letter (NAL) from the CFTC on behalf of PredictIt. This authorization allowed PredictIt to conduct its operations without having to register under the Commodity Exchange Act with the CFTC. Nonetheless, in August the previous year, CFTC declared the revocation of the NAL and simultaneously requested PredictIt to terminate its operations.
The US Fifth Circuit Court of Appeals ruled in favour of PredictIt on Friday, urging a district court to safeguard PredictIt from any further CFTC actions, “We have now decided that a preliminary injunction was necessary due to the likely arbitrary and capricious rescission of the no-action letter by the CFTC. Hence, we order the district court to instate a preliminary injunction while it reviews Appellants’ objections to the CFTC’s conduct,” wrote Fifth Circuit Judge Stuart Kyle Duncan.
PredictIt’s CEO Expresses High Opinion of the Court’s Ruling
Following the recent decision by the US Fifth Circuit Court of Appeals, the case will move forward to the US District Court for the Western District of Texas. Although the case is unresolved, the latest development signifies a crucial step in the legal tussle between PredictIt and the CFTC.
“This ruling is a tremendous triumph for prediction markets like PredictIt and individuals who value the understanding they offer. One of the premier courts in the nation concurs that PredictIt was granted an operational license in 2014, and the CFTC’s attempts to revoke it were unwarranted.“
John Phillips, PredictIt’s CEO and co-founder
Sharing his thoughts on Friday’s decision by the US Fifth Circuit Court of Appeals, PredictIt’s CEO and co-founder, John Phillips, conceded that it is a substantial victory for the platform. He clarified that the court’s acknowledgement that PredictIt had obtained a license in the form of an NAL back in 2014 gives their cause a significant boost. Moreover, he stated that the court deemed the CFTC’s move to disband the operations of PredictIt as unwarranted.
