Prediction Markets; Public Interest Determinations - Proposed Rules

Darrow AI, Inc. supports the Commission's proposed rules and requests specific clarifications regarding litigation-outcome event contracts. They argue that these contracts should not be considered to involve "Enumerated Activities" or "unlawful activity" because they settle on lawful adjudicative acts rather than the underlying historical conduct.

The Leech Lake Band of Ojibwe opposes the proposed rule, arguing that it threatens tribal sovereignty, violates the Indian Gaming Regulatory Act (IGRA), and lacks proper consumer protections for youth. They urge the CFTC to maintain existing categorical prohibitions on gaming-related event contracts and to engage in meaningful government-to-government consultation.

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.

Kyutaro Matsuzawa, an assistant professor of economics at San Diego State University, supports the proposed action by recommending that the agency distinguish between prediction markets based on emotionally salient events and impersonal ones. He argues that the agency should consider restricting contracts tied to emotionally salient events, such as elections, to mitigate potential social harms like increased intimate partner violence and crime.