Comment Text:
Dear Chairman and Commissioners,
My name is Omri Sesfao, and I'm a finance professional based in California. 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). I've used prediction markets a few times myself, and I believe they offer unique value for individuals and society when regulated sensibly.
As someone who works in finance, I rely on accurate data to make informed decisions, both for my clients and my personal investments. Prediction markets have provided insights that I can't find elsewhere, especially when it comes to forecasting elections and major public events. Their track record often beats polls and pundits, and that kind of aggregated wisdom benefits everyone, not just traders like me. Beyond forecasting, I've also seen their potential for hedging financial risks. For instance, during the last election cycle, I used a prediction market to offset potential impacts on my portfolio tied to policy changes. It's a practical tool, much like any other derivative product I work with, and it shouldn't be dismissed as mere gambling.
I understand there are concerns about manipulation and insider trading in these markets. But I strongly believe the CFTC already has robust tools to address these issues. Your existing authority over market manipulation and fraud, as applied to other derivatives, can be adapted to event contracts without the need for heavy-handed bans or overly restrictive rules. Shutting down or severely limiting prediction markets to stop a few bad actors feels like punishing the many for the sins of the few. It's worth noting that insider trading by federal employees or officials is already illegal under current laws. The focus should be on enforcement, not prohibition.
I'd like to specifically address a couple of questions from the ANPR. On Question 7, regarding public interest, I think prediction markets serve the public by democratizing access to information and risk management tools. And on Question 29, about inside information, I believe informed traders often improve price discovery, as long as existing laws against abusing nonpublic information are enforced. The CFTC should focus on targeted oversight rather than broad restrictions.
I'm asking you to support a balanced regulatory framework for prediction markets. They provide real economic value through forecasting and hedging, and with the right guardrails, the risks can be managed without stifling innovation. Please don't let fear of misuse lead to over-restriction. Let's keep these markets accessible and safe under your existing powers.
Thank you for considering my input.
Sincerely,
Omri Sesfao
