Wall Street loved using InTrade to predict election outcomes, but regulators took the wagering site away last year.

Now the people who created InTrade are back with Pivit, a new tool that combines sophisticated algorithms, crowd sourcing and social gaming to predict the outcomes of events like elections.

That kind of service can be very helpful for investors, who are constantly reminded how much influence Washington can have on financial markets.

"The value to investors is a way to reduce and distill anything going on in the world to two digits that becomes a reliable gauge of sentiment," said Gregory DePetris, co-founder of Binary Event Network, which operates Pivit.

How it works: Pivit is available to use for free on Apple's (AAPL)App Store and will eventually be rolled out on the web. Users are asked to predict whether the chances of a given event will go higher or lower than the algorithm is currently forecasting.

For example, on Tuesday morning, Pivit was projecting a 95% chance that the GOP will win control of the Senate following the midterm elections. Users who correctly predict the next move -- higher or lower -- will be rewarded with points.

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The key difference between Pivit and InTrade is that users can't place actual bets. That may please regulators, but could also make investors skeptical of Pivit's predictive clout. After all, users aren't putting their money where their predictions are.

At the same time, recent research shows that forcing users to put money down doesn't necessarily improve the quality of their predictions.

"If you can develop some kind of accountability -- whether it's monetary or reputational -- then the system has value," said Nicholas Colas, chief market strategist at ConvergEx Group, a provider of brokerage and trading services.

The new service rewards people for making the right prediction by using prizes and leaderboards that compare their points with people they know and users from the same location. Think of a modern day high score list on a pinball machine.

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Pivit is teaming up with CNN, the owner of this website, to provide predictions on the 2014 midterm election. Users can predict the odds of the GOP taking over the Senate and the outcomes of individual races like Republican hopeful Joni Ernst's quest to replace retiring Democrat Tom Harkin. (Pivit gives Ernst a 90% chance of succeeding.)

Wall Street is already taking notice of Pivit, which raised $6 million in funding from Guggenheim Partners and Broadhaven Capital Partners.

"Given that politics has become such an emotional topic in this country, anything that can bring together an accurate and unbiased forecast is going to have a lot of value," said Colas.