Comment Text:
Dear Chairman and Commissioners,
My name is Mateo Barrot, and I'm a student based in California with an academic interest in data and forecasting. I'm writing to express my support for the proportionate regulation of prediction markets as outlined in the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I've used prediction markets a few times myself, and I believe they offer unique value to society, especially in areas like accurate forecasting and financial risk management.
As someone studying data-driven decision-making, I've seen firsthand how prediction markets consistently outperform polls and pundits when it comes to forecasting events like elections or major policy shifts. The aggregated wisdom of many participants, each putting their own money on the line, creates a level of accuracy that traditional surveys just can't match. This isn't just useful for traders; it provides better information for everyone, from journalists to policymakers. I think this aligns directly with the CFTC's questions on public interest, like Question 7 about balancing innovation with consumer protection. Prediction markets are innovative tools that serve a clear public good through better price discovery.
I also value the ability to participate in legal, regulated markets. Platforms like Kalshi, operating under CFTC oversight, are far safer than unregulated offshore sites where there's no accountability. If we over-restrict or ban these markets, people won't stop trading; they'll just go to less safe places. I'd urge the CFTC to consider Question 11 on how these markets contribute to risk management. For me, and for many others, prediction markets offer a way to hedge personal or business risks tied to events like policy changes or economic shifts. A small business owner might hedge against a tariff hike, or someone like me might offset risks tied to student loan policies. This isn't gambling; it's practical.
Lastly, I'm concerned about U.S. competitiveness in financial innovation, which ties into Question 14 on comparing these markets to other tools. If we stifle prediction markets with heavy-handed rules, we risk ceding leadership to other countries that embrace this technology. As a student, I also see huge potential for academic research and data transparency with these platforms, providing raw material for studying human behavior and market dynamics.
I acknowledge there are risks, like manipulation or insider trading. But the CFTC already has tools to address these, and banning or over-restricting markets punishes everyone for the actions of a few. I respectfully ask that you craft rules that support well-regulated prediction markets, allowing ordinary people like me to participate while targeting specific risks with focused solutions.
Thank you for considering my input.
Sincerely,
Mateo Barrot
