Comment Text:
I study both the law and political science of democracy, and I believe that political prediction/futures markets are a valuable window into what people on the internet who wish to bet small amounts of real money believe about future political events. I have been both a participant in and an observer of these markets. I think they enrich our understanding of politics, the news media, political "conventional wisdom," and the extent to which crowds consistently get certain types of political predictions wrong. In my view, these markets have considerable value for social-science work on elections, and should not be regulated in ways that ultimately amount to shutting down these markets in the United States.
In addition, I think it is worth noting that political prediction/futures markets will continue to exist in the world whether or not the CFTC authorizes them, because in the UK and elsewhere there is a robust set of these betting markets which already include markets regarding United States politics. However, it is highly imperfect and messy to study such markets when U.S.-based participants, who would know them best, are excluded.
I do not think these markets are gaming, in the way that betting on a horse race is a form of gaming. Although the horse race metaphor is common in politics, this is something different. These bets are an expression of a kind of public opinion, not about what should happen in politics, but about what will happen. Although nonrepresentative of the nation as a whole, prediction markets are worthy of study. I hope you will not regulate them out of existence in this country.
Sincerely,
Joseph Fishkin
Professor of Law, UCLA
