Comment Text:
Dear Chairman and Commissioners,
My name is David Johnson, and I'm a trader and investor from Maryland. I've been involved in financial markets for years, and I've used prediction markets a few times to get a sense of where things like elections or major public events might be headed. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my strong support for well-regulated prediction markets. I believe they offer unique value to people like me, and to society at large, as long as the rules are fair and focused.
I've found prediction markets to be incredibly useful for getting information that I just can't find anywhere else. Whether it's an election outcome or a policy decision, the prices on these platforms often cut through the noise of polls and punditry. That kind of clarity helps me make better decisions, not just in trading but in planning my own financial future. I know I'm not alone in this; the aggregated wisdom of these markets benefits everyone, from individual investors to businesses trying to navigate uncertainty. Beyond that, I value the ability to hedge personal risks. For instance, an election result could shift tax policies that affect my investments, and having a way to offset that risk feels like a practical tool, not a game.
I'm also a big believer in freedom to participate in legal, regulated markets. Prediction markets aren't gambling; they take research and judgment, just like trading stocks or commodities. Shutting regular people like me out would only concentrate the benefits with big institutions, which doesn't seem fair. Plus, I've read the academic research, like studies by economists such as Wolfers and Zitzewitz, showing how these markets improve forecasting and price discovery. That kind of data transparency is good for public decision-making. And honestly, if the US doesn't lead on this kind of financial innovation, other countries will, and we'll be left behind.
I want to address some of the concerns raised in the ANPR, particularly around insider trading and manipulation in Questions 29-32 under Topic E. I get the worry about insiders skewing things, but informed trading often makes prices more accurate, not less. It benefits all participants by reflecting the best available information. Banning or over-restricting these markets to stop a few bad actors punishes everyone else. Insider trading and manipulation are already illegal, and the CFTC has the tools to enforce those laws. I'd rather see targeted enforcement than broad categorical bans. On consumer protection, as raised in Questions 7-14 under Topic B, regulated markets like those on CFTC-registered platforms are far safer than pushing activity to offshore alternatives with no oversight.
My ask is simple. Please support proportionate regulation of prediction markets that addresses specific risks without stifling their benefits. Lets keep these markets accessible, transparent, and innovative while ensuring theyre safe for participants like me.
Sincerely,
David Johnson
