Comment Text:
Dear Chairman and Commissioners,
My name is Richard Bateman, and I'm a trader and investor based in Connecticut. I've been active in financial markets for years, and Im writing to express my strong support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I use these markets to hedge risks tied to political and economic events, and I believe they offer unique value to individuals like me, as well as society at large.
Prediction markets aren't just a niche tool for traders; they produce forecasts that consistently outperform polls and pundits. I've seen firsthand how their prices on elections and public events cut through the noise of opinion and provide real, actionable insight. This isn't gambling, as some might claim. Event contracts serve legitimate economic purposes, much like futures markets, where I can buy or sell my position at any time to manage risk. For example, Ive used these markets to hedge against policy changes that could impact my investments or tax liabilities. That kind of risk management is invaluable, and its no different from hedging commodities or currencies.
I also believe that regulated platforms, like Kalshi operating under CFTC oversight, are far safer than the unregulated offshore alternatives. If the CFTC over-restricts or bans these markets, activity will just move to less transparent, riskier venues. That hurts consumers and undermines U.S. leadership in financial innovation. We should be setting the global standard for these markets, not ceding ground to other countries. Plus, informed trading in these markets actually improves price discovery. When knowledgeable participants trade, the resulting prices benefit everyone, from individual investors to policymakers.
Addressing some of your specific questions, like those in Topic Area B (Questions 7-14) on public interest, I urge you to prioritize innovation alongside consumer protection. And on Topic Area E (Questions 29-32) regarding inside information, Id point out that the CFTC already has robust tools to tackle manipulation and insider trading in other derivatives markets. Those same tools can be adapted here without resorting to broad bans. Proportionate, targeted regulation makes far more sense than sweeping categorical restrictions that punish legitimate participants.
Im not blind to the risks. Manipulation and unfair practices are real concerns, but shutting down or over-restricting prediction markets isnt the answer. Use the authority you have to go after bad actors, and keep these markets accessible to people like me who use them responsibly. I strongly encourage the CFTC to support well-regulated prediction markets with rules that address specific risks while preserving their benefits.
Thank you for considering my input.
Sincerely,
Richard Bateman
