Comment Text:
Hello,
I am writing regarding potential future rules regarding election futures market and specifically the PredictIt.org platform. I believe this platform provides significant public good and generates valuable data. In light of this I think the CFTC's classification of PredictIt's activities as "gaming" is flawed.
Here are some points to consider as you deliberate on future restrictions:
- PredictIt trades are capped at $850 per user per contract. This helps to keep the market small-scale and ensures that wealthy individuals cannot manipulate markets. This protects the sanctity of the crowdsourcing process, and differentiates PredictIt from other financial markets that are dominated by hedge funds and institutional investors.
- The research also shows that PredictIt makes users more likely to seek out factual information about current events. Users who build trading strategies around factual events tend to do better than those who trade based on their ideologies or misinformation. In an era where both liberal and conservative commentators are alarmed at the public’s acceptance of fake news and misinformation, these markets are one of the few mechanisms left for incentivizing the accumulation of true and accurate information (an antidote to fake news).
-In its 10 year history, PredictIt has made these crowdsourced probabilistic forecasts available to the public, and makes anonymized trade data available to researchers who study patterns in the data.
- Research shows that these forecasts are generally accurate and are generally more accurate than polling, especially earlier in a race. This is because polls are a snapshot in time, but prediction markets allow users to weigh the effect of factors (the criminal conviction of a presidential candidate, for example) that have not yet fully resonated with voters.
- Because of its accuracy, PredictIt data is widely cited by media, campaigns, and financial institutions, and even appears on the Bloomberg Terminal.
Thank you for considering this information.
Regards,
Ryan Moon
