InTrade Founders Launch New Forum for Political Predictions

Founders of political wagering site Intrade are back with a new forum for electoral prognosticating, minus one big thing: the wagering.

Pivit, a web and mobile application, is launching prediction markets this week for the midterm U.S. elections.

The app is the product of Binary Event Network Inc., a company founded by Gregory DePetris and John McNamara, who created the first iteration of Intrade in 1999, and with Jason Finch, who also worked at Intrade in its early days.

Intrade involved buying and selling investment contracts tied to events like elections. But the once-popular site closed its market in 2013 after regulatory pressure on online gambling and when it found what it called “financial irregularities.”

Pivit’s contracts are based in percentages, not dollars. Participating doesn’t require any money or pay out any rewards. Instead, the new market aims to attract people with rankings of the best predictors.

“We’re essentially taking everything we learned and applying it to Pivit,” said Mr. DePetris, chief executive of Binary Event Network.

Some academics argue that harnessing thousands or millions of individual opinions can produce more accurate predictions than experts, polls and computer models, an effect known as “the wisdom of crowds.” Companies such as Microsoft Corp. , as well as U.S. intelligence agencies, have funded research into prediction markets, which may be useful for forecasting customer and market behavior.

Now defunct, Intrade was at one point one of the most widely cited political-prediction marketplaces. During the 2012 election, related contracts represented over $200 million worth of wagers, Intrade said at the time.

Many of the founders had left the company by 2006, as Intrade, which was based in Dublin, faced increasing U.S. regulatory pressure. Regulators declared political-event contracts a form of gambling around the same time that lawmakers barred U.S. banks from dealing with online gambling operators in other countries.

The market suffered from other problems. In 2011, its chief executive, John Delaney, died while climbing Mount Everest. During the 2012 election, Intrade acknowledged that some participants were making outsize bets on presidential-election contracts that may have distorted the market. Then in 2013, the market stopped trading after the company said it found financial irregularities.