{"id":265275,"date":"2023-03-21T05:58:48","date_gmt":"2023-03-21T10:58:48","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=265275"},"modified":"2023-03-22T18:41:53","modified_gmt":"2023-03-22T23:41:53","slug":"predictit-founder-gets-more-time-to-respond-to-cftc-claims-as-lawsuit-continues","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/predictit-founder-gets-more-time-to-respond-to-cftc-claims-as-lawsuit-continues\/","title":{"rendered":"PredictIt Founder Gets More Time to Respond to CFTC Claims as Lawsuit Continues"},"content":{"rendered":"

Victoria University of Wellington, the New Zealand institution that created PredictIt more than eight years ago, has received more time to respond to US regulators seeking to shut down the online political futures exchange.<\/p>\n

\"CFTC\"<\/a>
The Commodity Futures Trading Commission building in Washington, DC. Victoria University in Wellington told Casino.org<\/em> late Monday that it has received more time to respond to a March 2 letter detailing allegations that PredictIt violated the No-Action letter the New Zealand school received in 2014, allowing it to start the online political futures exchange. (Image: CFTC)<\/figcaption><\/figure>\n

Monday was supposed to be the deadline for the school to respond to a March 2 letter<\/a> it received from the Commodity Futures Trading Commission (CFTC). In that letter, the federal agency said it rescinded an August 2022 notice in which the CFTC announced it was pulling the 2014 no-action letter that had enabled PredictIt to operate in a limited fashion.<\/p>\n

\n

In the March 2 letter, which the CFTC included a redacted version of in a filing with the Fifth Circuit Court of Appeals the following day, commission staff outlined specific violations it alleges PredictIt committed that broke the terms of the no-action letter. Instead of issuing a deadline for stopping trading as it did in the August letter, the commission initially set a Monday deadline in the letter for Victoria University to respond.<\/p>\n<\/div>\n

\u201cVictoria University of Wellington has not yet responded to the letter from the CFTC,\u201d the university told Casino.org<\/em> in a statement Monday night ET (Tuesday afternoon in New Zealand). \u201cThe CFTC has extended the date by which the University is to respond to 5 April 2023.\u201d<\/p>\n

Earlier on Monday, a commission spokesperson told Casino.org<\/em> the agency could not comment beyond what it has said in court filings and other public documents.<\/p>\n

CFTC Court Filing Due This Week<\/h2>\n

The CFTC wants the Fifth Circuit to lift an injunction<\/a> it placed on the agency earlier this year at the request of PredictIt and other plaintiffs in a federal lawsuit filed to keep the exchange alive. By revoking the original letter, the agency now says the injunction is moot and the appeal should be dismissed.<\/p>\n

The exchange was joined by Aristotle International, a Washington, DC-based political technology firm, and several traders and researchers who use the exchange in the lawsuit originally filed last September in a US District Court in Texas.<\/strong><\/p>\n

Monday\u2019s deadline was one of two key dates this week in the ongoing case between the CFTC and PredictIt. On or before Thursday, the CFTC must file its rebuttal to the plaintiff\u2019s response to its call for terminating the injunction and the appeal.<\/p>\n

Plaintiffs Claim CFTC Violated Injunction<\/h2>\n

Just as the CFTC called out the plaintiffs for not divulging that PredictIt and Aristotle knew about the CFTC\u2019s claims before the August letter, the plaintiff\u2019s response filed last week called out the agency.<\/p>\n

The plaintiffs argue that the CFTC had \u201cat least seven\u201d filings before its March 3 filing where it could have provided that information, but it never brought that up.<\/p>\n

Rather than dismiss the case, the plaintiffs want the court to find the CFTC in contempt for what it said is a violation of the injunction.<\/strong><\/p>\n

\u201cThe CFTC is proposing that the parties start all over again because it saw the writing on the wall and wanted to duck a feared ruling from this Court and to carry on its war against the PredictIt Market through other means,\u201d the plaintiffs wrote. \u201cThe problem is that this Court had enjoined such behavior.\u201d<\/p>\n

The plaintiffs seek attorneys\u2019 fees incurred for responding to the motion plus \u201cany costs associated with nervous investor behavior\u201d due to the CFTC\u2019s actions.<\/p>\n

\u201cViolating injunctions has consequences, and they typically exceed a government agency simply having to apologize,\u201d the filing stated.<\/p>\n

How CFTC Actions Have Affected PredictIt’s Markets<\/h2>\n

On Friday, Casino.org<\/em> spoke with Pratik Chougule, an author, a foreign policy political consultant, and host of the Star Spangled Gamblers<\/a> podcast. He\u2019s also a trader on the PredictIt exchange.<\/p>\n

Chougule told Casino.org<\/em> that several traders opted to exit the market shortly after the August letter, and some more chose to leave after the midterms concluded. Because of that, it\u2019s caused liquidity in the markets to drop.<\/p>\n

I think that traders overreacted,\u201d he told Casino.org<\/em>. \u201cI think that for the time being until, as we discussed, the legal case really has exhausted itself, I see no real reason to withdraw any money on here – unless you want to anyway. So, I have not withdrawn my money, and I urge anyone on PredictIt to stay with it.\u201d<\/p><\/blockquote>\n

Chougule also called out PredictIt and its organizers for a reputation of poorly communicating with traders that has created \u201ca credibility gap\u201d for the market. And, while PredictIt has tried to rally traders to support its case against the CFTC, operators have yet to inform traders on how to close down markets if that step becomes necessary.<\/p>\n

PredictIt does not charge traders a fee to create an account, but it does take a 10% fee on profits when traders sell their shares for a higher price than they initially paid. The exchange also levies a 5% fee for withdrawals.<\/p>\n

Chougule said he\u2019d recommend that organizers cut or do away with the withdrawal fee.<\/p>\n

\u201cIf they were to do that, I think it would help them in their legal case, too,\u201d he said. \u201cIt would make it easier for them to show that there have been real repercussions here if there were a flood of exits, but I think the market would also be more efficient. It would be easier to show the public interest value (of the exchange). And then, if the case were not to go their way, they would actually have an easier problem to resolve rather than the mess that they’re going get into if they don’t win. So, it’s not too late for that.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Victoria University of Wellington, the New Zealand institution that created PredictIt more than eight years ago, has received more time to respond to US regulators seeking to shut down the online political futures exchange. Monday was supposed to be the deadline for the school to respond to a March 2 letter it received from the […]<\/p>\n","protected":false},"author":45,"featured_media":224976,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[60,61],"tags":[85357,82218,82192,82190],"acf":[],"yoast_head":"\nPredictIt Founder Gets More Time to Respond to CFTC Claims<\/title>\n<meta name=\"description\" content=\"Victoria University told Casino.org it now has until April 5 to respond to the CFTC's allegations PredictIt's violated its No Action Letter.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/predictit-founder-gets-more-time-to-respond-to-cftc-claims-as-lawsuit-continues\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"PredictIt Founder Gets More Time to Respond to CFTC Claims\" \/>\n<meta property=\"og:description\" content=\"Victoria University told Casino.org it now has until April 5 to respond to the CFTC's allegations PredictIt's violated its No Action Letter.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/predictit-founder-gets-more-time-to-respond-to-cftc-claims-as-lawsuit-continues\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2023-03-21T10:58:48+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-03-22T23:41:53+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/4406624868_47648c5f1c_b.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"960\" \/>\n\t<meta property=\"og:image:height\" content=\"639\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Steve Bittenbender\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Steve Bittenbender\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/predictit-founder-gets-more-time-to-respond-to-cftc-claims-as-lawsuit-continues\/\",\"url\":\"https:\/\/www.casino.org\/news\/predictit-founder-gets-more-time-to-respond-to-cftc-claims-as-lawsuit-continues\/\",\"name\":\"PredictIt Founder Gets More Time to Respond to CFTC Claims\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/predictit-founder-gets-more-time-to-respond-to-cftc-claims-as-lawsuit-continues\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/predictit-founder-gets-more-time-to-respond-to-cftc-claims-as-lawsuit-continues\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/4406624868_47648c5f1c_b.jpg\",\"datePublished\":\"2023-03-21T10:58:48+00:00\",\"dateModified\":\"2023-03-22T23:41:53+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/eb30e765d812fc9b38b333f8d13068b2\"},\"description\":\"Victoria University told Casino.org it now has until April 5 to respond to the CFTC's allegations PredictIt's violated its No Action Letter.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/predictit-founder-gets-more-time-to-respond-to-cftc-claims-as-lawsuit-continues\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/predictit-founder-gets-more-time-to-respond-to-cftc-claims-as-lawsuit-continues\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/predictit-founder-gets-more-time-to-respond-to-cftc-claims-as-lawsuit-continues\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/4406624868_47648c5f1c_b.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/08\/4406624868_47648c5f1c_b.jpg\",\"width\":960,\"height\":639,\"caption\":\"The Commodity Futures Trading Commission building in Washington, DC. 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