What Robin Hanson told the CFTC about event markets (prediction markets)

No Gravatar

Robin Hanson:

Date: Mon, 07 Jul 2008 10:12:46 -0400
To: secretary@cftc.gov
From: Robin Hanson &lt-rhanson@gmu.edu&gt-
Subject: Comment on “-Concept Release on the Appropriate Regulatory Treatment of Event Contracts”-
—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—–
I am an event market innovator, having published the first detailed discussions envisioning their widespread application, having designed a widely used trading mechanism (the market scoring rule), and having co-developed the first internal corporate markets (at Xanadu), the first public web markets (the Foresight Exchange), and the aborted-but-influential Policy Analysis Market.

As I am less well trained in law than social science, I will not comment on what the C.F.T.C. is legally authorized to do, but only on how various policies correspond to public interest and public opinion. I speak here only for myself and not for any organization with which I may be affiliated.

The degree and type of regulation appropriate for a financial market depends on traders’- motives. Long ago most everything beyond direct physical exchange was widely discouraged or prohibited as “-gambling”- or “-speculation.”- The motives imputed to traders seemed to be some combination of mistakes, overconfidence, thrill of action, love of risk, and showing off one’-s confidence and risk tolerance.

While public opinion on gambling has changed little, eventually legal exceptions were carved out for markets where, though speculation was still possible, enough participants had more sympathetic motives to garner public support. Securities markets allowed business managers to hedge ownership, insurance markets allowed hedging of various idiosyncratic risks, and commodities futures markets allowed hedging of various common risks.

It has long been noted approvingly that such speculative markets often had the desirable side effect of inducing people to collect info and aggregate it into prices. But until recently such info was not considered or accepted as a primary explanation or justification for a market’-s existence. Given the myriad ways our society now suffers, often dramatically, from failures to aggregate info, I am very optimistic about the long term potential for such markets to offer substantial social value. However, the question remains of how such info-motivated markets should be regulated today.

Ideally an entire new regulatory regime would be carved out, on par with regimes for securities, insurance, and commodities futures regulation. But who would bother with such an effort before such markets had proven themselves able to realize substantial social value? And how could such markets prove themselves without at least tentative legal spaces in which to experiment? I know of no good reason why the C.F.T.C. should not provide one of the first such spaces.

Two key issues face a new regulatory regime for info-motivated event markets, especially one carved out of a common-risk-hedging commodities-future regulatory regime:

  • How does optimal regulation of info-motivated event markets differ from that of common-risk-hedging markets?
  • How can regulators ensure that this new regime is not used as a back door to escape prohibitions on other commodity futures trading, or to escape general prohibitions against gambling?

How Does Optimal Regulation Differ Here?

On the first question, the largest difference I see, by far, is the appropriate scale. When hedging risks it makes sense to focus first on risks, and hence trades, which are a large fraction of the wealth of the individuals or organizations involved. If risks are common there should be many who trade if any trade, and so market volume should be many times individual wealth levels. It also makes sense to devote a small fraction of this volume to efforts to avoid foul play. I have heard that it costs on the order of a million dollars to jump the regulatory hoops to gain approval for such markets, and I cannot say that this is not roughly the right cost magnitude.

For markets whose main function is to collect info, however, the appropriate scale seems far smaller. To collect info on a topic, those who know or could find out need only be offered a sufficient incentive to bother. In the lab, experimental economists see substantial effort and price info aggregation when only a few tens of dollars are at stake, and field data seems consistent with this estimate. If most of the social value from info-motivated event markets were concentrated in a few very important topics, it would not matter much if regulatory barriers prevented markets on topics with small info values. But if, as seems more plausible, much of the value is found in a long thick tail of smaller topics, then to realize this social value it is essential that regulatory barriers to creating such markets be reduced to the lowest feasible level.

For example, consider a topic where a social value of one thousand dollars could be realized, if only people were allowed to trade in a market on that topic. It is hard to see how this value could actually be realized if the regulatory cost to create this market were more than a few hundred dollars. If there were a million such topics, the total social value such markets could create would be one billion dollars.

A related difference is when it makes sense to limit participation. If most of a certain kind of risk is held by wealthy individuals or large organizations, then it can make sense to limit participation to such traders. But for info collection it is crucial to allow participation by the sorts of people who could plausibly obtain that info. For a great many topics these people will be spread out in the population, and not easily distinguished from most other people. A broad permission to participate will thus be desired in such cases.

How Can We Distinguish When This Regime Should Apply?

On the second question, we seek a reliable way to distinguish markets where the info collected is a strong rationale for its existence, a rationale strong enough to justify overturning the usual public presumption against generic speculation, and strong enough relative to hedging rationales to justify using this new regulatory regime, rather than other hedging regulatory regimes.

One proposed distinguishing criteria includes the size of an individual trader’-s stake, and the number of traders. The Iowa Electronic Markets are limited on both of these parameters. Such limits do succeed in preventing large hedging markets from masquerading as info-motivated event markets. But they do little to prevent generic gambling markets from masquerading as info-motivated event markets.

Another proposed distinguishing criteria is the form of the organization that hosts the market. Some have proposed that tax-exempt, research, and government organizations be given wider latitude than for-profit businesses. I understand that this matches a common public perception, but honestly it seems mostly wishful thinking to believe that such organizations are substantially more likely to create markets with a strong info rationale, or to avoid whatever problems one fears with
for-profit businesses.

Some have suggested that topics could be used to distinguish the strength of info rationale. Markets on sporting events might be presumed to have low info rationale, while markets on public policy might be presumed to have high info rationale. This approach seems to open a proverbial “-can of worms,”- however, requiring a great and continuing effort to categorize topics.

To ease this effort, one could inherit some other topic categorization. For example, regulation of speech distinguishes topics where free speech is presumed to perform very valuable social functions, and so has strong legal protection, from topics where such functions are less clear, allowing speech to be more easily regulated. Event markets might be permitted on topics where free speech has a strong legal protection.

In contrast to such weak indicators let me propose a stronger indicator of when a speculative market has a strong info rationale. I am not proposing that only markets which sport this indicator be allowed, but rather that at least such markets be allowed. My proposal is to permit markets where a sponsor pays to ensure that traders on average do not lose financially from participation, as this payment creates a strong presumption that this sponsor expected to gain substantial value from that info.

It is hard to see many of the benefits that traders may gain from trading, but we can more easily see the average financial costs that traders suffer. Traders may have to pay for permission to trade, to deposit into a system, to check prices and trading history, for each trade, and to withdraw their winnings. In addition, trader deposits may not earn competitive risk-adjusted rates of return. Payment is sometimes in the form of seeing ads. Such fees are essential to the profitability of “-gambling”- businesses today that rely primarily on traders’- speculative motives.

If for a particular topic, a sponsor were willing to ensure that traders paid none of these common trading fees, that sponsor would have credibly suggested that his or her market would not exist if that sponsor did not expect related info to have substantial value. If this sponsor furthermore subsidized this market, allowing traders to gain on average by trading against ignorant automated market makers, this would show even more clearly that this sponsor valued the resulting info. Such measures would ensure that traders suffered no average financial loss from their participation, though traders could still lose on average, such as by wasting too much time dealing with these markets.

Of course we do not expect sponsors to arise to support all topics where info collected by trading would have substantial social value. We expect businesses to sponsor markets on topics where they can profit from info, and charities to collect donations to support markets on topics they consider more broadly valuable. But we also expect many coordination failures, where each party prefers that others pay for commonly valuable info. So the case for prohibiting markets that fail my proposed criteria is much weaker than the case for permitting markets that meet this criteria.

It also remains possible that even when a sponsor finds info to be valuable enough to pay for, the social value of that info could be much less than the private value to this sponsor. If we could identify classes of such cases, these classes might form the basis of exceptions to this general permission I propose.

I have many other opinions about how such markets might be defined and regulated, but I’-ve already gone one for quite a bit here – if you like what you see here and want more, you know where to find me.

In Summary

In addition to existing regulatory regimes for ownership-hedging securities, idiosyncratic-risk-hedging insurance, and common-risk-hedging futures, it could make sense to have a distinct regulatory regime for markets whose main reason to exist is the info that they collect. Compared with existing commodities futures regulation, such a regime should set a much lower barrier to creating such markets, as much of the social value may be distributed in millions of small markets. And while it is hard to determine in general which markets would create high social info value, relative to cost, we should presume such high value when a sponsor is willing to pay to ensure that traders suffer no average financial cost from their participation.
—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-—-

Robin Hanson rhanson@gmu.edu http://hanson.gmu.edu
Research Associate, Future of Humanity Institute at Oxford University
Associate Professor of Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326 FAX: 703-993-2323

Robin Hanson

-

Are US-based real-money prediction exchanges to become federally regulated (as DCMs)? Or semi-regulated (as ECMs, or as exchanges covered by no-action letters)?

No Gravatar

BusinessWeek:

In its request for comment, the CFTC reminded the public that the commission should “-promote innovation for futures and derivatives.”- It also added that —hint, hint— the Iowa markets have been valuable sources of public information and have predicted Presidential outcomes better than polls. The 2000 act gave the CFTC the authority “-to promote responsible economic or financial innovation”- by creating an exemption for certain types of contracts (such as one in a prediction market). [...]

“-Basically I think they’-re going to expand the IEM no-action letter and take legal measures to make sure that legal contracts aren’-t subject to antigambling laws,”- says Chapman law professor Bell. [...]

-

BusinessWeek gets it right about where the CFTC is going. (Go reading the 2 pages.)

However, I still believe that HedgeStreet has a strong argument (about the political elections being “-excluded commodities”-) and I wonder what the CFTC will do about it.

-

Tom W. Bell rebuts the puritan and sterile petition organized by the American Enterprise Institute (which has on its payroll Paul Wolfowitz, the bright masterminder of the Iraq war).

No Gravatar

Tom W. Bell:

The CFTC should not limit “-no action”- status to markets run by tax-exempt organizations. The no-action letters that the CFTC issued to the IEM emphasized not the nature of the hosting institution, the University of Iowa, but rather the business model adopted by the IEM itself. Profitability could not have mattered, as tax-exempt organizations can and do earn profits (indeed, as their burgeoning endowments demonstrate, many universities earn immense profits). The CFTC apparently cared only that the IEM did not plan to profit from charging traders commissions. A tax-paying organization could satisfy that condition just as easily as a tax-exempt organization could. In either event, price discovery would flourish and consumers would win a safeguard against getting fleeced.

-

- The American Enterprise Institute’s proposals to legalize the real-money prediction markets in the United States of America

- In the for-profit vs not-for-profit debate, our prediction market luminaries, doctored by Bob, are on the wrong side of the issue.

- The definitive proof that FOR-PROFIT prediction exchanges (like BetFair and InTrade) are the best organizers of socially valuable prediction markets (like those on global warming and climate change).

- Analysis of the HedgeStreet’-s comment sent to the CFTC.

-

APPENDIX:

Paul Wolfowitz’-s profile at the American Enterprise Institute

- How the neo-cons drove the United States of America into the unecessary Iraq war

-

The CFTC is going to close the comments in 3 days. We have 3 days left to convince the CFTC to accept FOR-PROFIT prediction exchanges (e.g., InTrade USA or BetFair USA), and counter the puritan and sterile petition organized by the American Enterprise Institute (which has on its payroll Paul Wolfowi

No Gravatar

-

ADDRESSES: Comments should be sent to the Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581, Attention: Office of the Secretariat. Comments may be sent by facsimile to 202.418.5521, or by e-mail to secretary@cftc.gov.

Reference should be made to the “-Concept Release on the Appropriate Regulatory Treatment of Event Contracts.”- Comments may also be submitted through the Federal eRuleMaking Portal at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&amp-log=linklog&amp-to=http://web.archive.org/web/20080930170145/http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Bruce Fekrat, Special Counsel, Office of the Director (telephone 202.418.5578, e-mail bfekrat@cftc.gov), Division of Market Oversight, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581.

-

THE MIDAS ORACLE TAKES:

- CALL TO ACTION: Let’-s fight so that the CFTC allows the FOR-PROFIT prediction exchanges to deal with “-event markets”-.

- In the for-profit vs not-for-profit debate, our prediction market luminaries, doctored by Bob, are on the wrong side of the issue.

- The definitive proof that FOR-PROFIT prediction exchanges (like BetFair and InTrade) are the best organizers of socially valuable prediction markets (like those on global warming and climate change).

- Analysis of the HedgeStreet’-s comment sent to the CFTC.

-

BACKGROUND INFO:

- CFTC’s Concept Release on the Appropriate Regulatory Treatment of Event Contracts…- notably how they define “-event markets”-, how they are going to extend their “-exemption”- to other IEM-like prediction exchanges, and how they framed their questions to the public. Here are the comments sent to the CFTC.

- The BusinessWeek news article about the CFTC’-s concept release.

- The Arnold &amp- Porter lawyer’-s take. —- (PDF file)

- The Schulte, Roth &amp- Zabel lawyers’- take. —- (PDF file)

- The Sullivan &amp- Cromwell lawyers’- take. —- (PDF file)

- Michael Giberson’-s economic take.

- Chris Hibbert’-s libertarian take.

- Tom W. Bell’-s libertarian take.

- The American Enterprise Institute’s proposals to legalize the real-money prediction markets in the United States of America

-

COMMENTS TO THE CFTC

- Very soon, two prediction market organizations and one VIP will submit their comment to the CFTC.

- What Vernon Smith told the CFTC. —- (PDF file)

- Jed Christiansen’-s pragmatic take. —- Final draft – (PDF file) – His comment to the CFTC – (PDF file)

- The International Swaps and Derivatives Association’-s comment to the CFTC – (ISDA) —- (PDF file)

- Jason Ruspini’-s comment to the CFTC —- (PDF file)

- Tom W. Bell’-s petition, which will be sent to the CFTC. —- (Jonathan Gewirtz is in.)

- HedgeStreet’-s comment to the CFTC. —- (PDF file)

- A young economist rebuts the American Enterprise Institute. —- (MO mirror) —- Comment to the CFTC – (PDF file)

- Tom W. Bell rebuts the American Enterprise Institute.

- Robin Hanson’-s comment to the CFTC. —- (MO mirror)

-

APPENDIX:

Paul Wolfowitz’-s profile at the American Enterprise Institute

- How the neo-cons drove the United States of America into the unecessary Iraq war

-

Lets Tell the CFTC Where to Go.

No Gravatar

Update: I’-ve extended the deadline for signing up until 7 p.m. Pacific, Sunday, July 6. Also, I fixed a typo in paragraph 3, changing “-denying”- to “-giving.”- (Thanks, Gil!)&gt-

The deadline looms for interested parties to respond to the Commodity Futures Trading Commission’-s request for comments about regulating prediction markets (”-event markets”- in the CFTC’-s usage). I may or may not get around to a detailed, point-by-point response to the CFTC’-s many questions. In the meantime, though, I’-ve drafted a general statement that many of you might agree with. I invite you to sign it with me, so that together we might tell the CFTC where to go. Please see below for details on how to sign on. Here is the draft statement:

What regulatory treatment should the Commodities Futures Trading Commission (”-CFTC”-) apply to event markets? We the undersigned, who represent a wide range of viewpoints, agree on three general observations. First and foremost, the CFTC should do no harm. Second, at a minimum, the CFTC should make more general the sort of “-no action”- status enjoyed by the Iowa Electronic Markets (”-IEM”-). Third, if the CFTC decides to regulate event markets more substantively, it should adopt clear and limited jurisdictional boundaries and allow affected parties to step outside of them.

First, do no harm: Many sorts of event markets—including public ones, private ones, ones that offer only play-money trading, and ones that offer real-money trading—already thrive in the U.S. They have provided a rich array of benefits without evidently harming anyone. The CFTC could help event markets achieve still greater success by clarifying their legality. Instituting the wrong sort of regulations could suffocate event markets in their cradle, however. The CFTC should exercise a light hand, taking care to do no more than offer qualifying event markets the shelter of federal preemption and freeing them to continue operating under the extant legal regime.

Second, open up the “-no action”- option: Thanks in part to the “-no action”- letters that the CFTC has issued to it, the IEM has for many years benefited the public by offering real-money event markets. No sound reason precludes the CFTC from giving similar treatment to other institutions that, like the IEM, offer event markets solely for academic and experimental purposes and without imposing trading commissions.

Although the CFTC’-s “-no action”- letters do not specify the exact criteria the IEM had to satisfy, they took favorable note of the IEM’-s account limits. Those account limits effectively prevent the IEM from supporting significant hedging functions. If the CFTC builds a similar requirement into any general “-no action”- guidelines, it should adopt limits considerably more generous than the meager $500/trader limit adopted decades ago by the IEM. Even a limit ten times that amount would still effectively preclude hedging.

The CFTC should not limit “-no action”- status to markets run by tax-exempt organizations. The no-action letters that the CFTC issued to the IEM emphasized not the nature of the hosting institution, the University of Iowa, but rather the business model adopted by the IEM itself. Profitability could not have mattered, as tax-exempt organizations can and do earn profits (indeed, as their burgeoning endowments demonstrate, many universities earn immense profits). The CFTC apparently cared only that the IEM did not plan to profit from charging traders commissions. A tax-paying organization could satisfy that condition just as easily as a tax-exempt organization could. In either event, price discovery would flourish and consumers would win a safeguard against getting fleeced.

Third, preserve regulatory exit options: If the CFTC decides to write substantive regulations for event markets, it should recognize and guard against the risk of overregulation. Even well-intentioned and well-informed regulators remain human and, thus, all too apt to make mistakes. They run an especially large risk of making mistakes when they first attempt to regulate new institutions, such as event markets. To make matters worse, regulators typically lack reliable signals to determine when they have gone too far. Industries wither away for many reasons, after all.

The CFTC’-s approach to regulating event markets should accommodate these policy considerations by establishing clear jurisdictional boundaries and opening exit options. Thus, for instance, the CFTC might specify that it has no jurisdiction over event markets that offer trading only to members of a particular firm, over markets that offer only spot trading in negotiable conditional notes, or over markets that do not support significant hedging functions. Then, if the CFTC enacts unduly burdensome regulations, an event market could opt out of them by changing its business model. So long as markets publicly announce that they operate outside the CFTC’-s purview, allowing them that freedom of exit would harm nobody. To the contrary, it would help the CFTC gauge the suitability of its regulations and serve the public by protecting the continued viability of event markets.

Interested in signing on? Please drop me a private email (tbell at chapman dot edu) with your name, institutional affiliation, and snailmail address. I welcome your comments—I’-m sure a typo or two persists in my draft—but I of course cannot revamp the entire statement without mucking up the entire process. To leave me time to get everything together and out the door before the July 7 deadline, you’-ll have to contact me before noon Pacific time on Sunday, July 6.

[Crossposted at Agoraphilia and Midas Oracle.]

What to think of HedgeStreets comment to the CFTC

No Gravatar

It’-s a very important take.

- HedgeStreet’-s comment to the CFTC. —- (PDF file)

-

Basically, they are saying:

  1. We saw that the CFTC is entertaining the “-exemption”- way for prediction markets on politics and on other news.
  2. You have lost your sanity, folks. The “-exemption”- solution will bring you plenty of problems.
  3. You should approve these prediction markets under the classic, regulated way (the DCM solution). The classic regulation is the right way to deal with the potential problems you mentioned in your “-concept release”-.

-

That’-s a pretty strong argument.

(Just remember the conundrum that Jason Ruspini has exposed.) (PDF file)

-

Now, the counter argument is to say that the DCM way slows innovation —-thus the need to “-exempt”-.

That’-s a pretty strong argument, too.

Indeed, one can point that it’-s IEM, InTrade and BetFair who have grown the field of prediction markets —-not HedgeStreet.

-

DEVELOPING…- :-D

-

UPDATE: Jason Ruspini seems to be in agreement with HedgeStreet. I like that. See his comment, just below.

-

UPDATE: Jason Ruspini gives his understanding of the HedgeStreet’-s comment to the CFTC.

-

UPDATE: A second look at HedgeStreet’-s comment to the CFTC about “-event markets”-

-

The freshest comments sent to the CFTC

No Gravatar

- Jed Christiansen’-s comment to the CFTC – (PDF file)

- HedgeStreet’-s comment to the CFTC. —- (PDF file)

-

Previous blog posts by Chris F. Masse:

  • The last comments are up on the CFTC website, finally.
  • InTrade CEO John Delaney sends a good comment to the CFTC.
  • Robin Hanson’s purity test is based on an absurd principle.
  • NewsFutures is the most usable prediction exchange I know of.
  • HubDub question
  • Implied Prices for Presidential Decision-Aid Markets
  • What I said to BusinessWeek

The Chicago Mercantile Exchange is not a friend of the prediction markets. Nor is the ISDA.

No Gravatar

Will the Chicago Mercantile Exchange write to the CFTC?

…- asks Google’-s Bo Cowgill.

That could be…- However, I’-m not holding my breath. Here’-s why. The CME (along side the CBOE and ISDA) represents forces that does not push for the kind of financial innovations we are pushing here, on Midas Oracle. We are pulling for Web-based, de-intermediated, low-cost, event derivative exchanges. The financial dinosaurs (like the CME) do not.

Take a look at the CME’-s 2003 letter to the CFTC about HedgeStreet’-s application as a DCM. - (PDF file) – Here are the titles of the first 2 sections:

  1. HedgeStreet’s Proposal is Materially Deficient.
  2. The [HedgeStreet] Application Violates the CEA.

No need to go further. :-D …- You have computed that the CME was (in 2003) no friend of HedgeStreet —-and, thus, of our prediction markets. (For those who are just surfacing from an Afghan cave, yes, the CFTC did approve HedgeStreet’-s application, finally, and told the CME to go fugging themselves.) So, I’-m not holding my breath for a CME comment to the CFTC’-s concept release on “-event markets”-. Saying that the CME is talking for the prediction market community is like saying the Ayatollah Khamenei was talking for priests, ministers, and rabbis.

As for the ISDA, they represent big institutional traders…- who do not use exchanges ( !! ). What they say to the CFTC (PDF file), basically, is to be careful not to hurt the framework of the whole landscape. Well, thanks ISDA, but the CFTC knew that already.

As I said, 2 prediction market organizations will, each, submit their comment to the CFTC. I don’-t expect that to be a deep read, with regards to derivative regulations. However, their industrial strategy might transpire, and that might be interesting for curious people like me. :-D

The 3 interesting takes about the “-event markets”- are from:

  1. the CFTC —-if you are able to sense what their true opinion is.
  2. Jason Ruspini —-(PDF file).
  3. Tom W. Bell —-upcoming.

The future of US-based, non-sports, non-hedgeable prediction markets depends on those 3 poles of thought.

In the coming weeks, you’-ll see many intellectual interactions between them.

The real question is: Will Jason Ruspini and/or Tom W. Bell have a proven impact on the CFTC process? I wish that, but both of them do stray away from the CFTC’-s strict framework.

DEVELOPING…-

-

My question to Jason Ruspini

No Gravatar

Jason, thanks for your hard work on this issue. Your 7-page letter to the CFTC is a master document. —- (PDF file)

What makes you think that your proposals will create more freedom for our prediction exchanges than the CFTC’-s proposals?

Could you point to specific instances to us where you think that your input is more libertarian than the CFTC way? After all, your proposals contain many “-don’-t do that, and forbid that”- things. :-D

-

The CFTC is going to close the comments in 5 days. We have 5 days left to convince the CFTC to accept FOR-PROFIT prediction exchanges (e.g., InTrade USA or BetFair USA), and counter the puritan and sterile petition organized by the American Enterprise Institute (which has on its payroll Paul Wolfowi

No Gravatar

-

THE MIDAS ORACLE TAKES:

- CALL TO ACTION: Let’-s fight so that the CFTC allows the FOR-PROFIT prediction exchanges to deal with “-event markets”-.

- In the for-profit vs not-for-profit debate, our prediction market luminaries, doctored by Bob, are on the wrong side of the issue.

- The definitive proof that FOR-PROFIT prediction exchanges (like BetFair and InTrade) are the best organizers of socially valuable prediction markets (like those on global warming and climate change).

- COMMENTS TO THE CFTC: What to expect from Tom W. Bell and Jason Ruspini

-

BACKGROUND INFO:

- CFTC’s Concept Release on the Appropriate Regulatory Treatment of Event Contracts…- notably how they define “-event markets”-, how they are going to extend their “-exemption”- to other IEM-like prediction exchanges, and how they framed their questions to the public. Here are the comments sent to the CFTC.

- The Arnold &amp- Porter lawyer’-s take. —- (PDF file)

- The Schulte, Roth &amp- Zabel lawyers’- take. —- (PDF file)

- The Sullivan &amp- Cromwell lawyers’- take. —- (PDF file)

- Michael Giberson’-s economic take.

- Chris Hibbert’-s libertarian take.

- Tom W. Bell’-s libertarian take.

- The American Enterprise Institute’s proposals to legalize the real-money prediction markets in the United States of America

-

COMMENTS TO THE CFTC

- This week, two prediction market organizations and one VIP will submit their comment to the CFTC.

- What Vernon Smith told the CFTC. —- (PDF file)

- Jed Christiansen’-s pragmatic take. —- Final draft – (PDF file)

- The International Swaps and Derivatives Association’-s comment to the CFTC —- (ISDA) —- (PDF file)

- Jason Ruspini’-s comment to the CFTC —- (PDF file)

- A young economist rebuts the American Enterprise Institute. —- (MO mirror) —- Comment to the CFTC – (PDF file)

-

APPENDIX:

Paul Wolfowitz’-s profile at the American Enterprise Institute

- How the neo-cons drove the United States of America into the unecessary Iraq war

-