Comment Text:
Prediction markets should be closely regulated under state-gambling boards and adhere to state laws, similar to sportsbook companies, in order to avoid corruption, unfair practices, and to effectively enable age verification.
While sportsbook companies are solely centered around sports, and prediction markets try to differentiate themselves by allowing bets for other non-sport related events, a large percentage (between 90-40% for different prediction market companies) of prediction market bets are essentially sports betting.
Despite prediction markets companies attempts to distance themselves from official gambling language and advertising, prediction markets engage in essentially the same behavior that sportsbook companies do: buyers bet on the outcomes of an event, whose wager sets updated odds, and the cycle repeats.
Regulating prediction markets is not a departure from free-market capitalism, but an embrace of fair competition that gives appropriate consumers more protection from unfair outcomes caused by insider trading.
I should remind the CFTC of the importance of sportsbook companies being regulated by small government in the states they are permitted to operate in, and I urge the CFTC to recognize the inherent similarity between sportsbook companies and prediction markets, and to change the legal designation of prediction markets in order to turn regulation of this multibillion dollar industry over to state gambling boards with adherence to state laws.
