Comment Text:
Dear Chairman and Commissioners,
My name is Henry Schiffman, and I'm a trader and investor based in New York. I've been working in financial markets for over a decade, and Im writing to express my strong support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, published in 91 FR 12516. I believe these markets provide unique value, both to me personally and to society at large, and I urge the CFTC to adopt a balanced approach that allows them to thrive under appropriate oversight.
As a trader, I rely on prediction markets to hedge risks tied to major public events, especially elections and policy decisions that can impact my portfolio. For instance, during the last election cycle, I used these markets to offset potential losses from policy shifts that could have affected my investments in energy and tech. The prices on these platforms often give me insights I can't find in polls or news commentary. I've seen firsthand how they cut through noise and speculation to reflect real probabilities. This isn't just useful for me; it's valuable for anyone trying to make informed decisions, whether they're investors, business owners, or just regular citizens.
I know there are concerns about manipulation or insider trading in these markets, and I get why thats a worry. But I strongly believe the CFTC already has the tools to handle these issues. Your existing authority to combat market manipulation and enforce insider trading laws in other derivatives markets can easily apply here. I've watched the CFTC crack down on bad actors in futures and swaps with impressive results. There's no need to reinvent the wheel or impose blanket bans on prediction markets to address risks that are already illegal and enforceable. Shutting down or over-restricting these markets because of a few potential bad actors would punish honest participants like me and push activity to unregulated offshore platforms, which is far worse.
Id like to address a couple of specific questions from the ANPR. On Question 7, regarding the public interest, I think prediction markets serve a clear public good by improving forecasting accuracy for events like elections. On Question 29, about inside information, I believe informed traders actually help make prices more accurate, and existing laws already bar federal employees or others from abusing nonpublic info. Lets focus on enforcing those rules, not banning the markets.
Prediction markets aren't gambling. They take research and judgment, just like trading stocks or commodities. I hope the CFTC will craft proportionate regulations that protect consumers without stifling innovation. Please support the continued growth of these markets under a sensible framework.
Sincerely,
Henry Schiffman
