John McGinnis fears the federal government may squelch prediction markets.
An obscure government agency will soon decide whether citizens can get hold of information essential to modern democratic decision making. On Monday, the Commodity Futures Trading Commission began to analyze whether to create a safe harbor for prediction markets in the U.S., as these markets would otherwise be hamstrung by the strictures of financial trading laws. The CFTC should create the safe harbor. . .
Federal and most state laws do not generally prohibit gambling, even when the events themselves, like the outcomes of horse races, have no public benefits. Congress should therefore take the additional action of exempting prediction markets from online gambling prohibitions.
It's too bad we do not yet have the prediction market to tell us whether it is likely that the CFTC and Congress will do the right thing.