Comment Text:
Dear Chairman and Commissioners,
My name is Ben Fan, and I'm a student and academic based in the United States. I'm writing to express my support for the proportionate regulation of prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). As someone who studies economic and social trends, I closely follow prediction markets for their unique ability to aggregate information and forecast outcomes, even though I don't trade on them myself. I believe these markets provide immense value to society and deserve thoughtful regulation, not restrictive bans.
Prediction markets stand out because they produce information thats often more accurate than traditional polls or expert opinions. I've seen firsthand how these platforms cut through noise and bias to reflect real probabilities on everything from election results to policy shifts. As a student, I rely on this data to better understand public sentiment and inform my research. This isn't just useful for academics like me; it helps journalists, policymakers, and everyday citizens make sense of complex issues. The price discovery process in these markets is a public good, and shutting them down would mean losing a vital source of insight.
I also want to emphasize the role of informed trading in improving price discovery, which benefits all market participants. When people with deep knowledge or research contribute to the market, the resulting prices are more accurate and reflective of reality. This isn't a flaw; it's a strength. Addressing concerns about insider trading shouldn't mean banning these markets but rather enforcing existing laws and adapting current CFTC tools to monitor and prevent abuse. I believe the Commissions existing authority to combat manipulation, as discussed in Questions 1 and 2 of the ANPR, can be effectively applied here without resorting to overly broad restrictions.
Additionally, as someone engaged in academic work, I value the transparency and data that prediction markets provide. These platforms generate a wealth of publicly accessible information that researchers can analyze to understand decision-making and risk assessment. Question 7 in the ANPR asks about balancing innovation with consumer protection, and I believe supporting regulated prediction markets achieves that balance by fostering innovation in data aggregation while allowing the CFTC to oversee fair practices.
I understand there are legitimate concerns about manipulation or misuse, but the answer isn't to eliminate these markets. It's to regulate them sensibly. Banning prediction markets would push activity to unregulated offshore platforms, which helps no one. Instead, the CFTC should craft rules that protect participants while preserving the unique benefits these markets offer.
I urge you to support the development of prediction markets with targeted, fair regulations that address specific risks without stifling their potential. Thank you for considering my perspective as you shape this important policy.
Sincerely,
Ben Fan
