Comment Text:
Dear Chairman and Commissioners,
My name is John Smoth, and I'm a trader and investor based in Washington state. I've been active in financial markets for years, and I've used prediction markets a few times to inform my decisions and hedge risks. I'm writing to express my support for well-regulated prediction markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets offer unique value, and I urge you to craft rules that allow them to thrive while addressing real risks with targeted solutions.
As someone who spends a lot of time analyzing markets, Ive seen firsthand how prediction markets provide information you cant get elsewhere. They often predict outcomes more accurately than polls or expert opinions, which helps not just traders like me but also the public and even policymakers who need reliable data. I think of it as a tool for better decision-making, something that benefits society as a whole. Plus, allowing regular folks like me to participate keeps the system fair. If only big institutions can trade, theyll hoard the best insights, and thats not right.
I also want to stress that event contracts arent gambling. They require research and judgment, just like trading stocks or commodities. Ive used them to think through real-world events that impact my investments, and thats a legitimate economic purpose. Classifying them as "gaming" feels like a misstep to me, and I hope youll consider this in your response to Questions 15-22 on listed activities. These markets serve a real need for price discovery and risk management, not just entertainment.
On the concern about manipulation or insider trading, I get why thats a worry. But the CFTC already has strong tools to tackle these issues, just as you do for other derivatives. I dont see why new bans or heavy restrictions are needed when existing laws can address bad actors. Shutting down markets to stop a few cheaters punishes honest participants like me. Id point to Questions 29-32 on inside information, and say lets enforce whats already on the books rather than over-reacting.
Finally, I care about the U.S. staying competitive in financial innovation. If we over-regulate or ban prediction markets, were just pushing activity to offshore platforms with no oversight, or handing leadership to other countries. Id rather see the U.S. lead on this, with smart rules that keep markets safe but open. This ties into Questions 7-14 on public interest, where I think innovation should be balanced with protection, not sacrificed.
Im asking you to support proportionate regulation that lets prediction markets operate under clear, fair rules. Dont ban or overly restrict them. Thanks for considering my perspective as you shape this policy.
Sincerely,
John Smoth
