Comment Text:
Dear Chairman and Commissioners,
My name is Elzie Honicutt and I'm a current college student. I've been encountering Polymarket and Kalshi in my everyday life for what was actually a few months but feels much longer. From the beginning of the year, these "Prediction markets" have infiltrated ad space throughout my local college town. They've been posted on our collegiate events, on our cable and Youtube advertisements, and even pay for physical ads on trucks paid to drive through the college town.
This becomes an issue when noting that Kalshi, Polymarket, and sites like them, are betting apps. They don't actually "predict" anything; they're a tell of how much money is being spent expecting a certain outcome. Betting requires certain guardrails and rules to be operated safely, and these prediction markets have no current plans or strong incentive in regulating their bets, transparency, or fairness themselves.
Several Fraternities recently got in trouble with the school for betting money on the deaths of the scientists from the recent Artemis II mission on both Kalshi and Polymarket, dispite both publically claiming that they "don't monetize predictions on death". A Washington Post article recently came out about how Polymarket was able to bet on "Where in Iran would be bombed" and several accounts made bets moments before the bombs were actually dropped. In a more regulated circumstance this suspicious activity would be looked at for evidence of insider trading, but as far as I've seen that hasn't been the case.
Having such a flawed system disguising itself as a "prediction market" while getting involved with CNN, Fox news, and other major news networks gives people with a lot of money a way to directly spread misinformation, unfiltered, to Americans across the country. That in combination with the lack of guardrails to prevent insider trading gives a financial incentive to spreading misinformation to win money all while making the process easier than ever.
To finish, if Kalshi and Polymarket were actually places for gambling, then they would need a body that holds them accountable to the odds they advertise. As far as I'm aware, that regulatory arm of their business doesn't exist. I have interacted with people who bet on whether a Presidental speech would contain a specific word, and lost. While the word he bet on was said during the speech, Kalshi didn't pay out as "Their internal confirmation method deemed he didn't actually say it". This shows that Kalshi and Polymarket have the ability to retroactively nullify the terms of their predictions.
This and the above issues are of great concern to me and my peers, especially as college students getting relentlessly advertised to use these services. I support stricter laws over predictions markets, and hope that the changes in the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) minimize the potential risk to users (financial and otherwise) due to the potential for corruption and misuse.
