Comment Text:
Dear Chairman and Commissioners,
My name is Will Cole, and I'm a small business owner from Maryland. I'm writing to express my support for the proportionate regulation of prediction markets as outlined in the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I've used prediction markets a few times myself, and I believe they serve a valuable purpose for individuals like me, as well as for society at large, by providing unique insights that aren't available elsewhere.
As someone who runs a business, I rely on accurate information to make decisions, whether it's about inventory, hiring, or planning for economic shifts. Prediction markets have offered me a way to gauge probabilities on events that impact my bottom line, like policy changes or economic indicators. The prices in these markets often cut through the noise of pundits and polls, giving a clearer picture of what might happen. Ive found this especially helpful when trying to anticipate regulatory changes that could affect my operations. Beyond my own use, I see these markets as a public good because they aggregate information from a wide range of participants, making forecasts more reliable for everyone.
I'm particularly interested in the academic research behind prediction markets, which shows how they improve data transparency and price discovery. Studies by economists like Justin Wolfers and Eric Zitzewitz have demonstrated that these markets often outperform traditional forecasting methods. I believe informed trading, even by those with specialized knowledge, enhances this process. It doesn't hurt the market; it helps it. The more informed participants there are, the more accurate the prices become, benefiting everyone who relies on this data, from businesses like mine to policymakers. Addressing Questions 29 and 30 from your ANPR, Id argue that the CFTC should recognize the value of informed traders in improving price discovery, rather than viewing their participation as a problem. Insider trading is already illegal, and existing laws can handle bad actors without punishing the entire market.
I understand there are concerns about manipulation or misuse, and those shouldn't be ignored. But the CFTC already has tools to combat fraud and manipulation in other derivatives markets. Apply those same tools here. Shutting down or over-restricting prediction markets because of a few potential bad actors would be a mistake. It would push activity to unregulated offshore platforms, which are far riskier for everyone involved.
I urge you to support a regulatory framework that allows prediction markets to thrive while addressing specific risks with targeted rules. Lets keep this innovative tool accessible to regular people like me, not just big institutions. Thank you for considering my perspective.
Sincerely,
Will Cole
