Comment Text:
Dear Chairman and Commissioners,
My name is Delfin Walker, and I'm a student from Massachusetts writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've used prediction markets a few times, mostly out of curiosity as part of my academic studies, and Ive come to see their value both for research and for practical financial purposes. I strongly support well-regulated prediction markets and believe the CFTC should focus on proportionate rules rather than overly restrictive bans or classifications that could stifle their potential.
As a student, I'm particularly interested in how prediction markets aggregate information and provide data thats often more reliable than traditional polls or expert opinions. In my studies, I've seen how these markets can offer unique insights into public sentiment on economic and political events. The prices reflect a collective judgment thats hard to find elsewhere, and I think this is a public good, not just for traders but for researchers, policymakers, and anyone trying to understand complex issues. I also appreciate the potential for hedging personal financial risks. For example, as someone planning a future career, I can see the value in using prediction markets to offset uncertainties like policy changes or economic shifts that might affect student loans or job markets.
I want to emphasize that event contracts should not be classified as gaming. They serve real economic purposes, like price discovery and risk management, which are no different from other derivatives the CFTC already oversees. Treating them as gambling feels like a misstep to me; trading on these markets requires research and judgment, much like investing in stocks or commodities. Im worried that labeling them as gaming could limit academic access to this data or discourage legitimate use for hedging. In response to Questions 15-22 in the ANPR, particularly around defining gaming versus legitimate markets, I urge the CFTC to focus on the economic utility of these contracts rather than broad categorical restrictions.
I understand there are concerns about manipulation or insider trading, but I dont think the answer is to ban or over-restrict prediction markets. The CFTC already has tools to address bad actors, and those should be enforced rather than punishing everyone by shutting down a useful tool. In line with Questions 29-32 on inside information, I believe informed traders often improve price accuracy, and existing laws already prohibit misuse of nonpublic information by federal officials or others.
I ask the CFTC to support proportionate regulation that allows prediction markets to thrive while addressing specific risks with targeted rules. These markets offer unique value for research, transparency, and personal financial planning, and I hope the US can lead in this innovative space.
Sincerely,
Delfin Walker
