Comment Text:
Dear Chairman and Commissioners,
My name is Zeke Barnett, and I'm a student from Texas with a strong interest in markets and data analysis. I'm writing to express my support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). As someone studying algorithmic trading, I've found prediction markets to be an incredible space to learn and experiment in a less oversaturated environment compared to traditional stock exchanges. More importantly, they offer real value to me and society, and I believe the CFTC should regulate them proportionately, not ban or overly restrict them.
I use prediction markets to hedge personal financial risks tied to events like elections or economic policy changes. For instance, I've placed trades to offset potential impacts on my student budget if certain tax or education policies shift after an election. This isn't gambling, it's practical risk management, much like how businesses or investors use futures to protect against price swings. I also rely on the forecasts these markets produce. Time and again, they've proven more accurate than polls or pundits when it comes to elections and public events. That kind of information is invaluable, not just to traders like me, but to anyone trying to make sense of an uncertain world.
I want to address a few specific concerns from your ANPR. On the topic of public interest (Questions 7-14), I believe prediction markets strike a crucial balance by fostering innovation while providing actionable data. They help individuals and businesses hedge real risks, and the U.S. should lead in this financial innovation rather than cede ground to other countries. If we over-restrict or ban these markets, activity will just move offshore to unregulated platforms, which is far riskier for everyone. Regarding the classification of event contracts (Questions 15-22), I strongly believe they shouldn't be labeled as gaming. They serve legitimate economic purposes like hedging and price discovery, just as other derivatives do. As for insider trading worries (Questions 29-32), I think informed trading actually improves price accuracy and benefits all participants. Besides, the CFTC already has robust tools to tackle manipulation and insider trading in other markets. Those same tools can work here without punishing honest traders.
As a student, I also see the academic value in these markets. They generate transparent data for research, helping us understand how information aggregates in real time. Banning them would cut off a vital resource for learning and innovation. My ask is simple: please support proportionate regulation that addresses specific risks without stifling the benefits prediction markets bring to people like me and to the broader economy.
Thank you for considering my perspective.
Sincerely,
Zeke Barnett
