Comment Text:
Dear Chairman and Commissioners,
My name is Jacob Schwartzreich, and I'm an everyday citizen from New York writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've used prediction markets a few times, mostly for fun with sports events, and I can see their value in certain contexts. But I have serious concerns about their broader application, especially when it comes to elections and public events. While I support the idea of well-regulated markets for limited purposes, I believe the CFTC needs to draw a hard line on what these markets can cover to prevent real harm.
Ill be upfront: I find the casino-ification of our world to be incredibly toxic. Turning serious public events like elections into betting games feels wrong to me. Its not just about gambling; its about how these markets can directly affect real-world outcomes. People with inside information could use these platforms to profit off non-public knowledge, and thats a problem. I worry that prediction markets for political or policy events could incentivize bad behavior, like spreading misinformation or even manipulating results to cash in on a bet. While Ive enjoyed using these markets for sports, I think they should be outright banned for anything related to elections, public policy, or other high-stakes societal issues.
That said, I do see some value in the forecasting power of prediction markets when theyre limited to less consequential topics. Ive read that informed trading can improve price discovery, and I get how that could benefit participants by creating more accurate predictions. For something like sports, thats fine, maybe even useful. But when it comes to something like an election, the risks outweigh any potential benefit. Im particularly concerned with questions 29 through 32 in your ANPR about inside information. I dont think informed traders help price discovery in these sensitive areas; I think they exploit it. Insider trading is already a problem in other financial markets, and opening up prediction markets to serious public events just creates more opportunities for abuse.
I also want to touch on questions 7 through 14 about public interest. I dont believe markets on elections or political outcomes serve the public good. They turn civic engagement into a game of profit, and thats not what democracy needs. If anything, it could erode trust in our institutions even further.
Im asking the CFTC to regulate prediction markets with strict boundaries. Keep them limited to harmless topics like sports or entertainment, and ban them for elections, politics, or anything that could impact real-world outcomes in a dangerous way. Use the tools you already have to crack down on insider trading and manipulation, but dont let these markets expand into areas that could do more harm than good. Thank you for considering my perspective.
Sincerely,
Jacob Schwartzreich
