A message from iPredict

Over the past seven years, the team at Victoria Link have been running New Zealand's only prediction market, iPredict. It is one of only three "commercial" prediction markets operating globally. We've really enjoyed turning it from research into a practical tool which has become part of the New Zealand political narrative.

Prediction markets function based on the assumption that people will be more accurate when they back their opinion with money. There is a wide academic field studying this, and it could one day result in more accurate forecasting of a huge variety of events and even change how governments make decisions.

As prediction markets do not comfortably fit within any existing regulatory boxes, we have been working closely and positively with the Financial Markets Authority (FMA) to enable us to operate economically within the financial market regulations.

Regrettably the Ministry of Justice has not been so positive. We applied for an exemption from the Anti-Money Laundering and Countering Financing of Terrorism Act. We believed we would secure an exemption due to the limited possible investment into iPredict trades and the small nature of the Prediction market transactions.

Our application has been declined by the Minister, Simon Bridges, on the grounds that we are "a legitimate money laundering risk". This is essentially because we have no customer due diligence checks. He considered the level of regulatory burden is proportionate to the risk. He formed these views without any discussions with us.

We are an academic not-for-profit organisation and our agreement with the FMA dictates we place caps on transactions. For example, over the past seven years, we have handled a total of 3,782 withdrawals, with an average trader net worth of $41. Our withdrawal process is lengthy and we are a low risk of money laundering.

Because the cost of compliance is too high, we are forced to wind up operations in NZ. We are looking into the possibility of transferring our prediction activities to be included on PredictIt in the US, but this could take months to work through the regulatory requirements.

From now on, we are unable to take further deposits, sign ups or place new prediction stocks. We will continue existing stocks and you can continue to trade them.

We hope you will stay with us and transfer to PredictIt when we have the necessary approvals. However you may at any time sell down your stocks and withdraw your cash. All your funds are held in Prediction Clearing and these funds cover all our obligations. Anticipating higher than normal demands for withdrawals, our usual processing schedule will need to be suspended and withdrawals will be processed on a first come first served basis.

As an alternative we would be delighted if you chose to donate your remaining funds to further the beneficial research Victoria University of Wellington is conducting into prediction markets, or education research at the university.

It's been a whirlwind seven years, and we'd like to thank our fantastic community who have kept coming back to the site and our fantastic team who have managed and developed the site over the years.

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