Highlights from my @CFTC comment: Main thesis: Properly designed and regulated prediction markets serve the public interest through two primary mechanisms: 1. hedging, by enabling participants to hedge otherwise unhedgeable risks associated with one-off or non-standard events, and 2. information aggregation, by aggregating diffuse, private, and specialized information into a publicly available price signal. Five principles should guide the Commission's rulemaking: 1. The statutory framework requires a contract-specific, two-step analysis. The default for any given event contract is that it is not contrary to the public interest. Categorical prohibitions of entire classes of event contracts, without individualized public interest analysi, exceed the Commission's statutory authority. 2. Event contracts serve the public interest when they address risks and information about events that exist externally and independently of the markets themselves. The vast majority of markets currently offered, including sports, politics, current events, satisfy this condition. 3. Market structure, not contract subject matter, determines susceptibility to manipulation. Price manipulation is self-correcting in liquid markets; outcome integrity is the responsibility of the institutions that govern the underlying event, not the market operator or the Commission. 4. The Commission should distinguish information advantage from outcome control. Trading on superior information is the mechanism by which markets aggregate information. Without explicit and concrete evidence of a violation, the Commission must protect participants' right to confidentiality and anonymity. Neither the CFTC nor operators should be empowered to require individual participants to divulge confidential or proprietary information or trade secrets without substantial evidence to justify. 5. The CFTC's guiding mantra should be Serve and Protect: operators serve the public by offering the best product they can today and an even better product tomorrow; regulators protect the integrity of markets by fostering competition and innovation. But neither the Commission nor its operators should be compelled to protect participants from every adverse outcome that could occur in a prediction market. Trading on prediction markets, as on any financial market, is inherently adversarial and risky. The guiding principle for market participants is: protect yourself at all times. Participants should be made aware of and acknowledge these risks before trading. The stakes: the Commission's rulemaking will determine whether prediction markets mature into a transparent, federally regulated source of hedging and price discovery, or migrate offshore and to state-regulated sportsbook products where the Commission lacks surveillance authority and customers are stripped of fair-access protections. Full comment linked below.