Prediction Markets; Public Interest Determinations - Proposed Rules

Oregon Consumer Justice opposes the proposed rule, arguing that it prioritizes market expansion and profit over necessary consumer protections against the risks of gamified prediction markets. The organization advocates for more robust policies, vigorous enforcement of existing laws, and collaboration with other federal and state agencies to protect retail users from financial harm and addiction.

Tyler Young, a frequent user of prediction markets, supports preserving access to federally regulated prediction markets for sports and esports events. He argues that these markets should be regulated based on their specific structures and safeguards rather than being treated as unregulated gambling.

Mark Robert Moran, commenting in an individual capacity, supports the proposed rule but argues for a narrower designation of "participant-controlled discrete political or official acts." He advocates for a targeted supplemental notice to distinguish between aggregate political outcomes and specific acts controlled by a named individual, providing a framework for evaluating risks like information concentration and financial pressure.

Dr. David M. Rothschild, an academic researcher, opposes the proposed rule's category-based framework for prediction markets, arguing instead for a design-and-purpose-based approach. He contends that the current proposal fails to distinguish between high-information markets (like elections) and low-information "gaming" markets (like sports), and urges the Commission to codify a distinct regulatory pathway for nonprofit and smaller information-oriented markets.

The Tonto Apache Tribe opposes the proposed rules because they could allow prediction-market contracts to function as sports wagering or casino-style gaming, which would undermine Tribal sovereignty, economic self-sufficiency, and existing state and Tribal regulatory frameworks. They urge the Commission to reaffirm prohibitions on such contracts, preserve the statutory boundary between gambling and legitimate commodities, and conduct government-to-government Tribal consultation before taking final action.

Rohan Rathod, founder of Polaris, supports the proposed framework but argues that the primary axis of evaluation should shift from "subject matter" to "information structure." He recommends making susceptibility to material non-public foreknowledge an explicit, general public-interest factor to better address insider trading risks.

Senator David H. McCormick supports the Commission's efforts to clarify public interest determinations for prediction markets, particularly regarding contracts involving unlawful activities or games of chance. He urges the Commission to maintain a principles-based approach that balances innovation with investor protection and requests a public meeting of the Innovation Advisory Committee.