Comment Text:
I am submitting this comment to express concern regarding the current structure of prediction markets such as Kalshi and the broader implications for fairness and user experience under CFTC oversight.
Kalshi promotes its platform as a user versus user marketplace, implying a level playing field where individuals can participate on equal footing. In practice, this is not the case. Large trading firms deploy significant capital and advanced models to act as dominant market makers, often posting millions of dollars in liquidity. This creates an environment where individual participants, especially recreational users, are effectively competing against institutions with substantial informational and financial advantages.
As someone who actively attempts to market make on Kalshi, I have found it extremely difficult to have orders filled due to the overwhelming presence of institutional liquidity. My orders are routinely placed behind large blocks of capital, making participation inefficient and discouraging. This dynamic undermines the accessibility and appeal of the platform for everyday users.
Recreational participants should not be placed in direct competition with sophisticated trading firms that operate with superior technology, data, and execution capabilities. The current structure not only contradicts the notion of a fair and open marketplace but also risks alienating the very users that prediction markets aim to attract.
To create a more balanced and user friendly environment, I believe platforms like Kalshi should reconsider how market making access is structured. Limiting the role of large trading firms as primary market makers would help ensure that individual participants have a more meaningful opportunity to engage. Additionally, marketing should more accurately reflect the realities of participation rather than presenting an overly simplified view of fairness.
A more equitable framework would promote broader participation, improve user confidence, and better align with the principles of transparency and fairness that regulated markets are expected to uphold.
