History of Prediction market in Timeline

By Popular Timelines Editorial Team · Updated: April 10, 2026

Prediction markets are exchange-traded markets where individuals trade bets on the outcome of future events. These markets, also known as information markets, use financial incentives to aggregate beliefs about the likelihood of a specific event occurring. Contracts typically trade between 0 and 100%, with binary options being a common format that expire at either 0 or 100%. Prediction markets function as a form of crowdsourcing, effectively aggregating diverse opinions to generate a market price that reflects the crowd's perceived probability of the event. The primary goal is to elicit and combine beliefs about uncertain future outcomes through trading contracts with payoffs tied to those outcomes.

1945: Hayek's Prediction Market Idea

In 1945, Austrian economist Friedrich Hayek originated the idea that prediction markets are "mechanisms for collecting vast amounts of information held by individuals and synthesizing it into a useful data point".

1945: Hayek's "The Use of Knowledge in Society" Publication

In 1945, Friedrich Hayek published "The Use of Knowledge in Society", which provided the economic theory behind prediction markets.

1988: Prediction Market Accuracy in U.S. Presidential Elections

A study found that for the U.S. presidential elections between 1988 and 2004, prediction markets gave a more accurate estimate of the voting result than 74% of the studied opinion polls.

1993: University of Iowa Receives No-Action Letter

In 1993, the University of Iowa received a no-action letter, allowing the Iowa Electronic Markets platform to continue operating with restrictions.

2000: Commodity Futures Modernization Act Requires Self-Certification

In 2000, the Commodity Futures Modernization Act required prediction markets to "self-certify" their contracts.

2000: IEM Presidential Futures Market Inaccuracy

In the year 2000, inaccuracies in the IEM presidential futures markets seemed to come from buying that occurred on or after Election Day, November 7, 2000.

2003: Gambling Act 2003

In February 2026, the New Zealand Department of Internal Affairs ruled that prediction markets like Polymarket and Kalshi are prohibited under the Gambling Act 2003 and the Racing Industry Act 2020.

2004: Prediction Market Accuracy in U.S. Presidential Elections

A study found that for the U.S. presidential elections between 1988 and 2004, prediction markets gave a more accurate estimate of the voting result than 74% of the studied opinion polls.

2004: Surowiecki's "The Wisdom of Crowds" Publication

In 2004, James Surowiecki championed prediction markets in his book "The Wisdom of Crowds".

2004: Tradesports Presidential Market Manipulation Attempt

In the Tradesports 2004 presidential markets, an anonymous trader attempted to manipulate the market by selling short so many Bush 2004 presidential futures contracts that the price was driven to zero, but the price rebounded rapidly.

2005: Hanson, Oprea, and Porter Paper on Market Manipulation

In 2005, Hanson, Oprea, and Porter (George Mason U) published a paper entitled "Information Aggregation and Manipulation in an Experimental Market", showing how attempts at market manipulation can increase market accuracy.

2006: Study on Real-Money vs. Play-Money Prediction Markets

A 2006 study found that real-money prediction markets were significantly more accurate than play-money prediction markets for non-sports events.

2006: Sunstein's "Infotopia" Publication

In 2006, Cass Sunstein championed prediction markets in his book Infotopia.

2010: Dodd-Frank Act Amends Prediction Market Regulations

In 2010, the Dodd–Frank Wall Street Reform and Consumer Protection Act amended the law, creating a special rule for public-interest reviews on certain contracts.

2011: CFTC Deems Political Event Contracts Contrary to Public Interest

In 2011, the CFTC deemed the North American Derivatives Exchange's political event contracts to be contrary to the public interest.

June 2016: Brexit Prediction Market Inaccuracies

On Thursday, June 23, 2016, prediction markets failed to predict the United Kingdom's vote to leave the European Union, leaning heavily in favor of remaining in the EU until the moment votes were counted.

2016: Randomized Experiment on Prediction Market Accuracy

In 2016, a randomized experiment obtained that prediction markets were 12% less accurate than prediction polls.

2017: Canada Prohibits Trading Binary Options

In 2017, the Canadian Securities Administrators prohibited trading binary options.

2017: MIT Develops "Surprisingly Popular" Algorithm

In early 2017, researchers at MIT developed the "surprisingly popular" algorithm to improve answer accuracy from large crowds by considering confidence levels.

2020: Racing Industry Act 2020

In February 2026, the New Zealand Department of Internal Affairs ruled that prediction markets like Polymarket and Kalshi are prohibited under the Gambling Act 2003 and the Racing Industry Act 2020.

2022: CFTC Withdraws Support for PredictIt

In 2022, the CFTC withdrew support for PredictIt and became involved in litigation with the project, after previously allowing limited academic use.

2023: CFTC Finds Kalshi's Event Contracts Contrary to Public Interest

In 2023, the CFTC made the same finding for Kalshi's event contracts on which political party would control chambers of Congress.

October 2024: Kalshi Wins Lawsuit Against CFTC

In October 2024, prediction market Kalshi won a lawsuit against its regulator, the Commodity Futures Trading Commission, allowing it to revive regulated election prediction markets.

December 2024: Singapore Blocks Polymarket

In December 2024, Singapore's Gambling Regulatory Authority blocked Polymarket as an illegal online gambling platform.

2024: Kalshi Wins Lawsuit Against CFTC

In 2024, the District Court for the District of Columbia ruled in favor of Kalshi in a lawsuit against the CFTC, narrowly interpreting the CEA's mention of "gaming".

August 2025: Polymarket Blocked in Australia

In August 2025, the Australian Communications and Media Authority determined that Polymarket was a "prohibited and unlicensed regulated interactive gambling service" and blocked access to the website.

2025: Polymarket Banned in Ontario

In 2025, Polymarket was banned in Ontario.

2025: MetaMask Integrates Polymarket

In late 2025, MetaMask integrated Polymarket into its wallet interface, expanding user access to blockchain-based prediction markets.

February 2026: CFTC Asserts Authority in Crypto.com Lawsuit

In February 2026, the CFTC submitted an amicus brief asserting its sole authority in a lawsuit by Crypto.com against the state of Nevada.

February 2026: New Zealand Prohibits Prediction Markets

In February 2026, the New Zealand Department of Internal Affairs ruled that prediction markets like Polymarket and Kalshi are prohibited under the Gambling Act 2003 and the Racing Industry Act 2020.

March 2026: Polymarket Banned in Argentina

In March 2026, Polymarket was deemed an unlicensed betting platform and banned nationwide in Argentina by a Buenos Aires judge.

July 2026: EU's Markets in Crypto-Assets (MiCA) Regulation to Apply

In July 2026, the EU's Markets in Crypto-Assets (MiCA) regulation will come into effect and apply to prediction markets using cryptocurrency assets.

2026: Chris Murphy Plans to Propose Prediction Market Regulation Bill

In 2026, United States Representative Chris Murphy announced plans to propose a bill regulating prediction markets, citing concerns about potential insider trading and conflicts of interest.