Comment Text:
I wanted to send this comment to those deliberating over the decision to prevent "the commodification of U.S elections" as defined in the letter led by Elizabeth Warren, written to the CFTC on August 5th, 2024.
The classification of monetary stakes in political outcomes as mere gambling is shortsighted and a disservice to the people. Importantly, the outcomes of prediction markets are not arbitrary or created for betting, like sports or slot machines. Instead, these events have a real impact in the world. Allowing people to objectively show their convictions in important events wouldn't erode the public's trust in the electoral process, but allow for strengthened accountability in both sentiments and promises. It would encourage those with a gut feeling to seek more information, and allow those in power to be held accountable for their beliefs in an unprecedented way.
For instance, if a politician were to own a number of shares in the outcome of them passing policy if they were to be elected, they would be financially incentivized to actually pass that policy if the people did elect them. In this way, prediction markets can act as a measure of truth.
In the letter, it is written:
"Political bets change the motivations behind each vote, replacing political convictions with financial calculations."
What this sentiment misses is that political conviction development is already fueled by financial calculations. Attention-hungry media outlets with little incentive to report the unbiased truth are financially incentivized to write exclusively what their users will click. Social media algorithms calculate precisely how to send their users down rabbit holes that do not consider the truth in any capacity.
This is the current financial calculation being made in political conviction pipeline today. Prediction markets are a way for those who are lost in this pipeline to see some semblance of a common reality.
As I said, blunt regulation would be shortsighted, and would ignore not just the reality of politics today, but deny U.S citizens the potential for something better. This is not comparable to sports betting or gambling. It can increase political accountability and reduce misinformation in a field where these things matter the most, yet are currently painfully absent. I truly hope you reconsider the potential for these markets amidst the landscape of today. They may serve an important part of our future.
