Comment Text:
Please take strong regulatory action regarding event contract derivatives traded on prediction markets. Prediction market activity is causing serious concerns about insider trading, and involve events that should remain outside the realm of financial speculation. Wagering on military operations, foreign policy decisions, terrorism, assassination, or other government actions results in unacceptable risks because it will allow people with nonpublic information about those decisions to have the opportunity to exploit that information. If government decisions are vulnerable to influence by private financial interests public trust will be damaged.
The Commission should explicitly prohibit event contracts related to military operations, acts of war, terrorism, political assassinations, and non-financial government policy decisions as contrary to the public interest. Also, any event contract where the outcome can be known in advance or controlled by a specific individual or small group is inherently risks manipulation and should face a presumption against approval. This includes award show results, political speeches, corporate announcements, and any event where insiders have definitive advance knowledge.
