Comment Text:
Dear Chairman and Commissioners,
My name is Jacob Forman, and I'm a trader and investor based in Florida. I'm writing to comment on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've used prediction markets a few times myself, and I believe they have real value for people like me and for society as a whole. I'm in favor of well-regulated prediction markets, and I want to share my thoughts on why they should be supported with smart, targeted rules rather than broad restrictions.
I like the concept of prediction markets because they provide unique information that you can't find anywhere else. I've seen firsthand how their forecasts on elections and public events often beat out polls or pundits. That kind of accuracy helps me make better decisions as an investor, and I think it benefits everyone when that data is out there. Plus, these markets let regular folks like me participate in a space that would otherwise be locked up by big institutions. Keeping access open to everyday traders makes the system fairer and the prices more accurate. It's not gambling, it's about research and judgment, just like trading stocks or commodities.
That said, I do worry about insiders using these markets to benefit themselves with information the rest of us don't have. I think that kind of behavior should be illegal, and I'm glad to know that federal employees and others are already barred from trading on nonpublic info. The CFTC already has tools to tackle manipulation and insider trading in other markets, so I believe those same tools can work here without needing to ban entire categories of contracts. Shutting down prediction markets to stop a few bad actors would hurt honest participants like me, and it would likely push activity to unregulated offshore platforms where there's no oversight at all. I'd rather see regulated markets here in the US, with strong consumer protections in place.
I'm also aware of the academic research, like studies by economists such as Wolfers and Zitzewitz, showing how prediction markets aggregate information efficiently. Informed trading, when it's fair and legal, actually improves price discovery and helps everyone. I think the CFTC should consider this in response to Questions 29-32 in the ANPR about inside information. Focus on enforcing existing laws against misuse of nonpublic data rather than restricting the markets themselves. And to Questions 7-14 on public interest, I'd argue that balancing innovation with protection means allowing these markets to operate under clear, proportionate rules that don't stifle their forecasting value.
I urge the CFTC to support prediction markets with targeted regulations that address specific risks without broad bans. Keep access open for regular traders like me, and ensure the US leads in this space rather than driving it offshore. Thank you for considering my perspective.
Sincerely,
Jacob Forman
