Comment Text:
Dear Chairman and Commissioners,
My name is Michael Clapp, and I'm just an everyday citizen from Washington state 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 having access to these platforms under fair, regulated conditions. I hope my perspective helps as you consider how to approach this growing space.
I believe prediction markets are a valuable tool for people like me, not just big investors or institutions. They let regular folks participate in a system that can provide unique information you can't find anywhere else. More than that, they help individuals and businesses manage real risks in uncertain times. For example, I've used these markets to hedge against potential economic shifts tied to election outcomes that could affect my personal finances, like changes in tax policy. It's not gambling, it's a practical way to protect myself, much like buying insurance or investing in stocks after doing my homework. I know small businesses also use these markets to offset risks from policy changes or economic data releases, like a new CPI report impacting costs. This kind of hedging is a legitimate need, not a game.
I'm also concerned about keeping access open to everyone. If only big players can participate, the benefits of better price discovery and information stay locked away with them. Letting everyday people like me trade on these platforms makes the system fairer and the predictions more accurate, since more voices are included. Of course, I understand there are risks, like insider trading or manipulation. But those are already illegal, and the CFTC has the power to enforce against bad actors. Shutting down or over-restricting prediction markets to stop a few cheaters feels like punishing the rest of us who use them responsibly. It's like closing the stock market because of a few insider traders. Just use the tools you have.
I'd like to address a couple of specific questions from the ANPR. On Question 7, about balancing innovation and consumer protection, I think regulation should focus on transparency and enforcement, not broad bans, to keep markets safe while letting them grow. On Question 15, regarding defining gaming versus legitimate markets, I urge you to see prediction markets as distinct from gambling since they serve real economic purposes like hedging and information gathering.
In closing, I ask that the CFTC support proportionate regulation of prediction markets. Don't ban or overly restrict them. Keep them accessible to regular people under clear, fair rules that protect against abuse while preserving their benefits. Thank you for considering my input.
Sincerely,
Michael Clapp
