Comment Text:
Dear Chairman and Commissioners,
My name is Jaden Hospedales, and I'm a trader and investor based in New York. I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I strongly support the development of well-regulated prediction markets, and I want to explain why theyre valuable to me and to the broader public.
As someone who actively trades and invests, Ive found prediction markets to be a unique tool for hedging and managing risk. For example, Ive used these markets to offset potential financial impacts from political events or economic data releases that could affect my portfolio. What sets these platforms apart is how they aggregate information into prices that often outshine traditional polls or expert opinions. That kind of insight isnt just helpful for traders like me; its a public good. Better information can guide smarter decisions, whether its a business planning for policy changes or a citizen trying to understand the likelihood of major events.
One thing I appreciate about the platform I use is its built-in safeguards. If I try to wager more than I should, it stops me and prompts me to scale back. This kind of feature helps prevent reckless behavior or addiction, showing that these markets arent about gambling but about thoughtful participation. Thats why I strongly disagree with classifying event contracts as gaming. They serve real economic purposes, like hedging and price discovery, much like other financial instruments I trade. Labeling them as gaming ignores the research and judgment involved, akin to what I put into stock or commodity investments.
I also believe informed trading is a net positive. When knowledgeable participants trade, they sharpen the accuracy of market prices, which benefits everyone, not just those in the market. Yes, there are concerns about insider trading, but those are already illegal under existing laws. The CFTC has the authority to tackle manipulation or abuse without banning entire categories of contracts. Shutting down prediction markets over a few bad actors would be like closing stock exchanges because of insider trading scandals. It punishes the wrong people.
Id like to address a couple of specific questions from the ANPR. On Question 7, regarding public interest, I think prediction markets clearly serve the public by improving access to reliable forecasts. And on Question 29, about inside information, I believe informed trading generally enhances price discovery, so long as existing laws against misuse of nonpublic information are enforced.
I urge the CFTC to support proportionate regulation of prediction markets. Dont over-restrict or ban them. Focus on targeted rules to address specific risks while preserving the benefits these markets bring to people like me and to society at large.
Sincerely,
Jaden Hospedales
