WSJ Letter to Editor | Prediction Markets Aren’t a New Vegas

Andy Kessler's "Gambling by Another Name" (Inside View, April 27) distorts reality, so as the head of the federal agency tasked with regulating commodity derivatives markets, I am happy to offer some needed clarification: Under the Commodity Exchange Act, the Commodity Futures Trading Commission holds exclusive authority over prediction markets. While some may harbor skepticism about innovative financial products, we firmly stand by our jurisdiction and remain committed to protecting it. These markets provide significant benefits to individuals, businesses, and the broader economy, and we will continue to ensure their integrity and growth. If we regulate them away like Mr. Kessler wants, then they will continue to grow offshore where there are no rules or guidelines putting our information streams at risk of manipulation by foreign adversaries.

Claims that "insider trading is rampant," and that our insider trading rules are "fuzzier" than others are simply untrue. I've made it clear time and time again that anyone who engages in insider trading will be found and prosecuted to the full extent of the law. The agency has a proven track record in preventing and enforcing actions against insider trading. During my first 100 days leading the agency, we strengthened and modernized our strategies to address any bad actors in these markets and have brought enforcement actions against those who violated federal laws.

The CFTC continues to serve as a vigilant regulator of prediction markets. These platforms operate as federally regulated exchanges with clearinghouses and comprehensive investor protections, identical to those found in other derivatives markets. Our agency remains dedicated to overseeing these markets thoroughly and responsibly.