Comment Text:
Dear Chairman and Commissioners,
My name is Maclay Teefey, and I'm just an everyday citizen from Virginia writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I have a background in data science and statistics, so I understand how tough it is to predict outcomes consistently without some kind of edge, like insider information. I've used prediction markets a few times, and while I have serious reservations, I feel compelled to comment because I believe theres a bigger picture here.
Ill be upfront: Im skeptical of prediction markets like Kalshi and Polymarket. Ive placed a bet on one before, specifically on the NCAA basketball championship game, and to me, it felt like gambling, plain and simple. I suspect a lot of their revenue comes from people treating these platforms as a way to wager, not as a serious financial tool. That said, I cant ignore that these markets do produce unique information through price discovery. Even if I dont trust the motives behind them, the data they generate can be more accurate than polls or expert opinions. As someone who values better information for public decision-making, I see a potential benefit there, not just for traders but for society as a whole.
Still, Im torn. I worry deeply about the incentives these markets create. The temptation to use insider information, especially on events tied to government or powerful organizations, seems like a real danger. Its already hard to predict without an unfair advantage, and I fear these platforms could reward bad actors over honest participants. But I dont think an outright ban is the answer. Shutting them down might just push activity to shadier, unregulated corners of the internet. Instead, I think the CFTC should focus on strict oversight. Regarding your questions on inside information, like in Questions 29 and 30, I believe informed trading can improve price discovery, but only if there are ironclad rules to prevent abuse. The CFTC already has tools to tackle manipulation and insider trading in other markets. Use them here, and dont let a few bad apples spoil the potential benefits.
On the public interest front, as in Questions 7 and 9, I think theres a balance to strike. Yes, prediction markets can offer valuable insights, but they shouldnt be a free-for-all. Im not convinced theyre entirely distinct from gambling, and Id urge you to consider classifying them as such or at least regulating them with that risk in mind. Dont let campaigns to preserve their status cloud the real issues.
Im only writing because I got an email about this and felt I had to speak up. Im not here to cheerlead for these platforms, but I do think proportionate regulation, not a total ban, is the way to go. Protect the public, prevent abuse, and let the data speak if its truly useful.
Sincerely,
Maclay Teefey
