Comment Text:
Banning PredictIt and similar markets from operating in the US would be a gross destruction of public good in the United States, while at the same time failing to solve the problems a ban purports to.
Prediction markets have been shown again and again to be valuable sources of public information about the aggregate opinion of experts and the crowd. They incentivize citizens to develop rational judgements about the world in their predictions and inform the public.
The way PredictIt in particular is structured makes one of the best platforms for this. By capping investments at $850 they preserve wisdom of the crowd knowledge by limiting individual influences in the market.
Without PredictIt, people will use VPNs to violate the law to bet in foreign and decentralized markets such as PolyMarket. These are not regulated by the CFTC, making them riskier to use.
The negative aspects of election prediction markets WILL NOT be stopped by revoking PredictIt's permission to operate. Gambling addicts will flock to foreign markets without stop losses, and the data generated will less accurate due to institutional investment crowding out individual's knowledge, if it is made public at all. Those with insider knowledge will continue to profit unfairly from these unregulated markets, likely even more so due to the lack of investment limits.
Ultimately, if we as a society allow sports betting, there is no rational reason to ban election futures trading. Election futures trading provides numerous social benefits that sports betting does not, with the same social costs.
