Comment Text:
The CFTC should not allow prediction markets to operate as futures by their current standards. The rules inherent to the system of websites such as Polymarket or Kalshi incentivize manipulation, by explicitly allowing insider information to influence your purchases. They also are decided not based on truth, but through voting by a third party (UMA) that does not enforce their users' participation or lack thereof in prediction markets. This means that one single person can make a prediction, and then vote on the "result" to outweigh those invested in the truth, because they did not like the outcome. These are in no way a stock market and are not tied to any product or business success, up to betting on things like forest fire occurrence rates.
Any regulation on these systems must address purchases for random chance events or assassination contracts (such as the above example of forest fires, a person with a large bet could purposefully cause a fire to fulfill their contract) nor should they be allowed to decide the truth by vote, such as with UMA. These turn an information aggregation machine into betting or an easily manipulable market, which do not abide by CFTC rules for other markets and should not be allowed for the good of American citizens.
