Prediction Markets; Public Interest Determinations - Proposed Rules

The Hispanic Leadership Fund (HLF) opposes the proposed rules, arguing that sports event contracts on prediction markets are contrary to the public interest. They contend that these contracts do not serve the primary purposes of the Commodity Exchange Act and instead threaten the financial stability of vulnerable communities by displacing household savings.

The National Conference of State Legislatures (NCSL) supports the proposed action provided that the final rule defines prediction markets as "gaming" and upholds state authority to regulate them. They argue that prediction markets should be subject to the same state licensing and consumer protection requirements as sports wagering to prevent federal preemption of state laws.

Bruce Merati, Founder of BetEx, supports the proposed rules but argues for a framework that allows exchange-based technology to coexist with existing state gaming regulations. He advocates for a cooperative approach where federal oversight focuses on market integrity and reporting while states maintain control over licensing, consumer protections, and responsible gaming.

Sportradar Group AG supports the Commission's factor-based framework for public interest determinations regarding prediction markets. They advocate for specific refinements including clearer definitions for "league-verified" data, minimum quality standards for settlement data, and the integration of proven sports integrity monitoring organizations into the surveillance framework.

The Financial Services Innovation Coalition (FSIC) supports the proposed rules and urges the Commission to determine that sports event contracts are contrary to the public interest. They argue that these contracts are marketed as financial investments to retail participants but are functionally sports wagers, which misuses the credibility of the derivatives regulatory framework.

Jim Bob Morris, founder of Wanna.com and Wanna Parlay, supports the proposed action to strictly enforce public interest determinations against binary sports event contracts. He argues that allowing these contracts would create a loophole for regulatory arbitrage, undermining state gaming laws, tribal sovereignty, and the competitive standing of law-abiding operators.

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.

PinHigh Sports LLC submits a comment in support of the proposed rules regarding prediction markets. The company argues that the rules provide necessary clarity and oversight while protecting the integrity of the markets and the interests of participants.

Reifi, Inc. opposes the categorical classification of "Player injury contracts" as contrary to the public interest, arguing that their specific OTC swap products are distinct from retail prediction markets. They argue these swaps are necessary for professional sports teams to hedge business risks and request that the Commission allow these specific contracts to be listed and cleared on registered Swap Execution Facilities.