Comment Text:
Dear Chairman and Commissioners,
My name is Matthew Sheahan, and I'm just a regular citizen from Minnesota writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I'm new to using prediction markets, but I've quickly come to see their value, and I strongly support their continued operation under fair, proportionate regulation by the CFTC.
I started dabbling in prediction markets to test and sharpen my understanding of the world. It's not just about making a few bucks; it's about being rewarded for digging into issues, reading up, and making sense of complex events. Whether it's an election outcome or a policy change, these markets give me better information than polls or pundits ever could. I've noticed how often their forecasts beat out the so-called experts, and that kind of accuracy isn't just useful to me as a trader, it's valuable to everyone, from journalists to policymakers. A truth-seeking society should encourage tools like this, not stifle them.
I also see real economic purpose here. Prediction markets aren't gambling, no matter what some might say. They're more like investing in stocks or commodities, requiring research and judgment about real-world events. Plus, they let people like me hedge personal risks. If an election or a federal decision could hit my taxes or my small side business, trading on an outcome helps me manage that uncertainty. Businesses do the same for bigger risks, like regulatory shifts or tariffs. This isn't a game; it's a practical tool.
I understand concerns about manipulation or insider trading, but the CFTC already has strong tools to tackle those issues. They're illegal in any regulated market, and you have the power to enforce that. Banning or over-restricting prediction markets doesn't solve the problem; it just pushes activity to unregulated offshore platforms where there's no oversight at all. That's worse for everyone. And honestly, informed trading often improves price discovery, making the market's predictions even sharper, which benefits us all.
I'm also worried about the US falling behind. We should be leading in financial innovation, not ceding ground to other countries. If we over-regulate or label these event contracts as "gaming" instead of recognizing their legitimate purpose, we risk losing a cutting-edge tool to overseas markets.
So, in response to some of your specific questions, like those in Topic Area B (Questions 7-14) about public interest and innovation, and Topic Area C (Questions 15-22) on defining gaming, I urge you to see prediction markets as a net positive. And for Topic Area E (Questions 29-32) on inside information, I believe targeted enforcement of existing laws is the answer, not broad restrictions.
Please support proportionate regulation that addresses specific risks without shutting down these valuable markets. Let regular folks like me keep participating in a legal, regulated space where we can learn, hedge, and contribute to better information for everyone.
Sincerely,
Matthew Sheahan
