Comment Text:
Dear Chairman and Commissioners,
My name is Matthew Encinas Acosta, and I'm a trader and investor based in California. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've used prediction markets a few times myself, and I strongly support their development under fair and sensible regulation by the CFTC. I believe these markets offer unique value to individuals like me and to society as a whole, and I want to share my perspective on why they should be supported rather than overly restricted.
As someone who trades and invests, I see prediction markets as a powerful tool for managing real-world risks. For example, I've used them to hedge against uncertainties tied to economic policy changes that could impact my investments. Small businesses, too, can use these markets to protect against shifts in regulations or election outcomes that might affect their bottom line. This isn't gambling, it's practical. The prices in these markets often provide insights that you can't find in polls or news, and that information benefits everyone, not just traders. I think allowing regular people like me to participate makes the system fairer and the data more accurate, rather than locking it up with big institutions.
I'm also very concerned about consumer protection, which is why I believe regulation is critical. Right now, without clear rules, people might turn to offshore platforms that offer no oversight or safety. I've seen firsthand how unregulated spaces can expose users to fraud or manipulation. Regulated markets, like those under CFTC oversight, are a much better option. They provide transparency and accountability, which protects folks like me while still letting innovation happen. Addressing specific risks, like insider trading or manipulation, should be the focus, not banning entire categories of contracts. The CFTC already has tools to tackle bad actors, and those should be applied here too.
Id like to touch on a couple of questions from the ANPR that resonate with me. On Question 7, regarding balancing innovation and consumer protection, I think the answer lies in targeted rules that address specific harms without stifling the benefits of prediction markets. And on Question 29, about inside information, I believe informed traders often improve price accuracy, but clear enforcement of existing laws against insider trading can prevent abuse without shutting down the market.
In closing, I urge the CFTC to support proportionate regulation of prediction markets. Don't ban or over-restrict them. These markets help individuals and businesses hedge real risks, and with the right oversight, they can thrive safely. Thank you for considering my input.
Sincerely,
Matthew Encinas Acosta
