Comment Text:
Dear Chairman and Commissioners,
My name is David Berkovich, and I'm a finance professional based in Florida. I'm 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 myself, and I strongly support their continued operation under fair, proportionate regulation by the CFTC.
As someone who works in finance, I value the unique information that prediction markets provide. I've seen firsthand how their forecasts on elections and public events often outperform polls and pundits. For example, during the last election cycle, I checked a prediction market to get a sense of the likely outcome, and it was far closer to the actual result than any news outlet's analysis. This kind of aggregated insight isn't just helpful to traders like me; it's valuable to the public, journalists, and even policymakers who need accurate data to make decisions. I believe these markets democratize access to information, letting regular people like me participate in a system that would otherwise be dominated by big institutions.
I also worry about what happens if these markets are banned or over-restricted. If the CFTC clamps down too hard, activity won't just disappear. It'll move to unregulated offshore platforms where there's no oversight, no consumer protection, and no accountability. I've seen this pattern in finance before, where heavy-handed rules push legitimate activity into shadier corners of the internet. Keeping prediction markets legal and regulated here in the US is the better path, ensuring transparency and fairness.
That said, I do have a concern about insider trading. I don't think government employees or anyone with access to nonpublic information should be allowed to trade on these markets. There needs to be strict enforcement of existing laws that prevent this kind of abuse. I appreciate the CFTC's questions on inside information, particularly Question 29 about whether informed traders aid price discovery. My view is that while informed trading can improve accuracy, it must not come from insiders who have an unfair edge. Existing laws already cover this, and the CFTC should focus on enforcing them rather than banning entire markets to address a few bad actors.
I'm also drawn to Question 7 on balancing innovation with consumer protection. I think the answer lies in targeted rules that address specific risks without stifling the benefits of these markets. Prediction markets aren't gambling; they're a tool for forecasting and risk management, much like other financial instruments I work with daily.
I urge the CFTC to support well-regulated prediction markets with clear, fair guidelines. Don't ban or overly restrict them, as that would harm regular participants like me and push activity to less safe venues. Thank you for considering my perspective.
Sincerely,
David Berkovich
