Comment on CFTC-2026-0331, CFTC-2026-0331-0001, Lorenzo, Barberis Canonico

Cassandra Laboratories Foundation, Inc. ("Cassandra") is a 501(c)(3) public charity (EIN 88-2645005) operating as a collective intelligence research institute. Cassandra submits this comment in response to the Commission's Advance Notice of Proposed Rulemaking on Prediction Markets, published at 91 Fed. Reg. 12516 (March 16, 2026). Footnote 6 of this ANPRM acknowledges what the rest of the rulemaking ignores. The Commission's own background section cites two staff no-action positions CFTC Staff Letter No. 93-66 (Iowa Electronic Markets, 1993) and CFTC Staff Letter No. 14-130 (PredictIt, 2014) as the recognized academic-purpose pathway for prediction markets. The forty questions that follow then proceed as if prediction markets were a single category. They are not. There are two: a commercial, consumer-facing, transaction-fee-maximizing submarket; and a nonprofit, research-oriented submarket focused on price discovery for scientific and policy-relevant events. The Commission has been administering precisely this distinction, on a case-by-case basis, for thirty-three years. This rulemaking is the appropriate vehicle for codifying what staff practice has long recognized. The two submarkets are not differentiated by scale. The nonprofit research submarket is not a constrained version of the commercial submarket; it is a public-interest version. Nonprofit operators can do everything commercial operators do and, in subject matter areas where commercial operation is structurally incompatible with public-interest objectives, more. The federal government's documented research interest in prediction markets through the IARPA Aggregative Contingent Estimation program (2011 2015) is a clear example: intelligence-community use cases require institutional permanence, independence from commercial acquisition, and full data transparency, properties that commercial operators cannot reliably provide and that contractual workarounds do not substitute for. The absence of a codified nonprofit pathway is the binding constraint preventing the federal government from re-engaging with prediction markets as a tool for public purposes its own research has validated. The 90-day public interest determination clock under CEA section 5c(c)(5)(C)(iv) is meaningful only if "commencement of review" is given an objective definition. Current Commission practice treats commencement as a discretionary internal trigger the clock begins to run only when staff decide to formally docket and begin substantive review. The result is variation that the statute does not contemplate. Cassandra submitted a no-action relief request to the Market Participants Division on January 24, 2024; over 800 days later, the application is pending without a publicly assigned docket number, substantive determination, or public indication of formal commencement. Phantom Technologies Inc. submitted a no-action request on March 13, 2026; the Division issued CFTC Staff Letter No. 26-09 four days later. The question is not whether the Commission is capable of acting promptly on no-action requests; the Phantom matter demonstrates that it is. The question is whether the statutory framework Congress enacted permits the Commission to indefinitely defer the start of the 90-day clock for some applicants while processing others on a four-day timeline. Cassandra recommends that the Commission adopt, by rule or interpretive guidance, the following definition of "commencement of review": review commences upon the Commission's receipt of a substantively complete application, with completeness assessed against published filing requirements. Once an application is determined complete, the 90-day clock starts. The substantive case is straightforward. The parallel pathway exists. It has operated for three decades. It has produced a substantial empirical record on price discovery, hedging utility, and information aggregation that the academic literature documents extensively. The Commission's footnote 6 is its own implicit acknowledgment that academic-purpose markets serve a public interest distinct from commercial markets. The next step formalizing that recognition through codification rather than continued reliance on case-by-case discretionary staff relief is overdue. The full comment, including detailed responses to Questions 1, 7, 9, 10, 11, 26, 36, and 40, is provided as an attachment.Project contentCassandra Created by youAdd PDFs, documents, or other text to reference in this project.