Comment Text:
I am writing to urge the Commission to take strong regulatory action regarding event contract derivatives traded on prediction markets. The current trajectory of prediction markets raises serious concerns about market integrity, insider trading, and the commodification of events that should remain outside the realm of financial speculation. Event contracts that allow wagering on military operations, foreign policy decisions, terrorism, assassination, or other government actions create unacceptable risks because individuals with nonpublic information about those decisions have both the opportunity and financial incentive to exploit that information. When citizens perceive that government decisions may be influenced by private financial interests, it erodes public trust.
There are already examples of some of the consequences of these types of markets from the sports betting realm. Athletes have reported being pressured by excessive bets on their performance, and many have received threats by individuals who “lost money” on them. Sponsorship of sports teams and leagues by betting sites have fueled concerns over fair play. These are just a few examples from something as innocuous as sports; extending this to politics, military action, etc could lead to the perception that policymakers are gaming the system to enrich certain people, or taking odds as a proxy survey of public opinion. Too many possibilities exist for abuse of this system, and no real public benefit exists. I strongly urge you to restrict these gambling sites to help prevent harm.
