Comment Text:
Dear Chairman and Commissioners,
My name is Jim Clements, and I'm just a regular citizen from California 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, and I strongly believe they serve a valuable purpose for people like me, as well as for society as a whole. I want to urge the CFTC to support well-regulated prediction markets with proportionate rules, rather than imposing broad bans or overly restrictive policies.
I've always been fascinated by how prediction markets can forecast outcomes better than polls or pundits. Whether it's an election or some other public event, the prices on these platforms often cut through the noise and give a clearer picture of what's likely to happen. That kind of information isn't just helpful for traders; it's useful for everyone, from regular folks like me to policymakers trying to make sense of the world. I also appreciate that these markets let everyday people participate. If only big institutions could trade, they'd hog all the insights. Opening it up feels fairer, and honestly, it probably makes the predictions sharper with more voices in the mix.
On a personal level, I see real value in using prediction markets to hedge risks. As someone who worries about how political or economic events might hit my wallet, whether it's a policy change affecting taxes or a rate hike messing with my budget, having a way to offset that uncertainty is huge. This isn't gambling, no matter what some might say. It takes research and judgment, just like investing in stocks. Labeling event contracts as "gaming" feels like a misstep when they serve legitimate economic purposes like price discovery and risk management.
I understand there are concerns about manipulation or insider trading, and those are valid. But the CFTC already has strong tools to tackle those issues in other markets, and I believe they can be adapted here. Banning or over-restricting prediction markets doesn't solve the problem; it just pushes activity to unregulated offshore platforms, which are way riskier. I've looked at platforms like Kalshi, which operate under CFTC oversight, and that's the kind of safe, transparent environment we need more of. The US should be leading in financial innovation, not handing the advantage to other countries by driving these markets away.
Touching on some of your specific questions, like those in the Public Interest section (Questions 7-14), I think prediction markets strike a balance between innovation and protection when regulated properly. And regarding Listed Activities (Questions 15-22), I urge you not to classify event contracts as gaming; theyre a tool for hedging and information, not a game of chance. Proportionate rules that target specific risks make more sense than blanket prohibitions.
Please support regulated prediction markets with fair, focused regulations. Don't let overreach or bans stifle something that benefits so many of us.
Sincerely,
Jim Clements
