Comment Text:
Dear Chairman and Commissioners,
My name is Ben McKenna, and I'm a trader and investor based in Florida. I'm writing to comment 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 development under fair, proportionate regulation by the CFTC. I believe these markets provide real value to people like me and to society as a whole, and I want to share why I think they deserve a thoughtful approach rather than heavy-handed restrictions.
As a trader, I rely on accurate information to make decisions. Prediction markets have consistently impressed me with their ability to forecast outcomes, especially for elections and major public events. I've seen them outperform polls and pundits time and again. That kind of insight isn't just helpful for traders; it's valuable for everyone, from businesses to regular citizens trying to understand what's coming next. Beyond forecasting, these markets also let individuals and businesses hedge real risks. For example, I've used them to offset potential impacts from policy changes or economic shifts that could affect my investments. This isn't gambling, it's a practical tool, much like trading futures or options.
I also value the freedom to participate in legal, regulated markets. If the CFTC over-restricts or bans certain event contracts by labeling them as "gaming," it won't stop the activity. It will just push it offshore to unregulated platforms where there's no oversight or consumer protection. I've traded in regulated environments, and I know the difference it makes to have rules and transparency. Let's keep this activity here, under your supervision, where it can be done safely.
On that note, I don't think event contracts should be classified as gaming at all. They serve legitimate economic purposes, like price discovery and risk management, just as other derivatives do. I'm concerned with some of the questions in the ANPR, like those in Topic C (Questions 15-22), about defining gaming versus legitimate markets. These contracts aren't about luck; they take research and judgment, the same skills I use in my regular trading.
Finally, I believe the US should be a leader in financial innovation. If we stifle prediction markets with overly strict rules, as discussed in Topic B (Questions 7-14) on balancing innovation and protection, we risk ceding ground to other countries. We have the chance to set the standard for how these markets operate globally, and I hope we take it.
I'm asking the CFTC to support prediction markets with regulation that addresses specific risks like manipulation or insider trading, without broad bans or over-restrictions. Use the tools you already have and adapt them to this space. Let's build a framework that keeps these markets safe, accessible, and innovative right here in the US.
Thank you for considering my input.
Sincerely,
Ben McKenna
