Comment Text:
Dear Chairman and Commissioners,
My name is Jacob Daniel, and Im a journalist based in Indiana. Ive spent my career reporting on economic and political trends, often relying on diverse sources to understand whats really happening. Thats why Im writing to comment on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I strongly support the development of well-regulated prediction markets in the United States, and I urge the CFTC to craft rules that encourage innovation while addressing specific risks, rather than imposing broad restrictions or bans.
As someone who follows prediction markets closely, though I dont trade myself, Ive seen their value in providing unique insights. The aggregated data from these platforms often cuts through noise and bias in a way that traditional polls or punditry cant match. For journalists like me, and for the public at large, this kind of price discovery is a vital tool for understanding probabilities around elections, policy changes, or economic shifts. Its not just about traders making a buck. Its about better information for everyone, which ties directly to questions 7 and 11 in your ANPR about public interest and price discovery benefits.
I also believe in the freedom to participate in legal, regulated markets. Ordinary citizens, small businesses, and even larger entities should be able to use prediction markets to hedge risks tied to events like regulatory changes or political outcomes. For instance, a local business owner in Indiana might want to hedge against a federal policy shift that could impact their operations. Why shouldnt they have access to a regulated tool for that? Banning or over-restricting these markets wont stop the demand, it will just push activity to unregulated offshore platforms where theres less oversight and more risk. Thats a worse outcome for consumer protection, a concern raised in your question 8.
On top of that, the United States should be a leader in financial innovation. If we clamp down too hard on prediction markets, were handing the advantage to other countries that are more willing to embrace new ideas. We cant afford to cede that ground. And lets not forget that informed trading isnt a bug, its a feature. When knowledgeable participants trade, they improve price accuracy, which benefits everyone, not just those in the market. This speaks to your question 29 on whether informed traders aid price discovery, and my answer is a clear yes.
I understand there are concerns about manipulation or insider trading, but the CFTC already has tools to address those issues. Use them. Dont punish the many for the actions of a few by over-restricting these markets. I urge you to develop proportionate regulations that protect participants while preserving the unique benefits prediction markets offer.
Thank you for considering my input.
Sincerely,
Jacob Daniel
