Comment Text:
Dear Chairman and Commissioners,
I am an investor based in the United States. I have been an active participant in prediction markets such as Kalshi for some time, and I am 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). These markets provide meaningful value to individual participants like me and to the broader public, and I urge the CFTC to adopt proportionate, balanced regulations rather than bans or overly restrictive frameworks.
From my experience, prediction markets offer insights that are difficult to obtain elsewhere. Their forecasts on elections and public events routinely outperform polls and commentary. I have relied on these markets to understand complex developments—particularly those with potential implications for my investments. This forecasting accuracy benefits not only traders but also journalists, researchers, and policymakers by offering a clearer, data‑driven view of likely outcomes. These markets are not mere entertainment; they aggregate dispersed information in a uniquely effective way.
Prediction markets also play an important role in hedging. I have used event‑driven contracts tied to economic indicators—such as interest rate decisions—to manage risk within my portfolio. This activity is not gambling; it is a legitimate, economically grounded application akin to hedging with commodity futures. Event contracts fulfill a real economic function, and treating them as gaming would obscure their utility. I encourage the Commission to reflect this distinction when considering questions 15–22 on the line between legitimate markets and gaming.
I believe regulated U.S. platforms such as Kalshi deliver substantially greater safety and transparency than unregulated offshore markets. Overly restrictive rules would have the opposite of their intended effect, pushing traders toward venues with no oversight and weakening market integrity. The United States should lead in financial innovation rather than allow activity to migrate overseas. The CFTC already possesses strong authorities to address manipulation and insider trading, as outlined in questions 1–6 and 29–32. Focused enforcement, rather than sweeping prohibitions, is the most effective way to address misconduct without penalizing legitimate market participants
I also support greater data transparency and ongoing academic research into prediction markets. Their forecasting accuracy is well‑documented, and public access to this data benefits society. For questions 7–14, the right balance between innovation and consumer protection is a regulatory approach that allows these markets to function under clear and proportionate rules.
Prediction markets provide real benefits: they help individuals hedge risk, they generate highly accurate forecasts, and they broaden access to valuable information. I respectfully urge the CFTC to regulate them in a way that preserves these benefits and maintains the United States’ leadership in financial innovation, while ensuring markets remain safe and fair. I ask that the Commission avoid bans or excessive restrictions.
Thank you.
Sincerely,
Terence A. Lobo
