Comment Text:
Dear Chairman and Commissioners,
My name is Michael Hindi, and I'm a trader and investor from the United States. I'm 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). As someone who actively trades on platforms like Kalshi and Polymarket, Ive seen firsthand how these markets provide unique value, and I urge the CFTC to regulate them proportionately without banning or over-restricting them.
Prediction markets help me cut through the noise of news and opinions to get accurate probabilities on critical events. For instance, when Im trying to make investment decisions, having real-time data on Federal Reserve rate decisions or election outcomes gives me an edge as an ordinary person. Without these markets, Id be stuck relying on less reliable polls or pundit speculation. This isnt just about me, though. These markets level the playing field by stripping away information asymmetry that usually benefits big institutions. The aggregated wisdom of many traders produces forecasts that are consistently more accurate than traditional methods, benefiting not just traders but the public and even policymakers who need reliable data.
I also use prediction markets to hedge real risks as a business owner. Whether its an election result that could impact tax policy or a Fed decision affecting interest rates, these event contracts let me manage uncertainty in ways that traditional financial tools cant match. This isnt gambling, despite what some might claim. Trading on these platforms requires research and judgment, just like investing in stocks or commodities. Classifying event contracts as "gaming" would be a mistake, as they serve legitimate economic purposes like price discovery and risk management. Id point to Question 15 from your ANPR, on defining gaming versus legitimate markets, and argue strongly that prediction markets fall into the latter category.
I understand concerns about manipulation or insider trading, but banning these markets isnt the answer. The CFTC already has tools to combat fraud and manipulation, and laws already prohibit federal employees from trading on nonpublic information. Shutting down or over-restricting prediction markets would just push activity to unregulated offshore platforms, which are far less safe than regulated venues like Kalshi. On this point, Id refer to Question 7 about balancing innovation and consumer protection, and urge you to prioritize regulation over prohibition to keep activity under your oversight.
Prediction markets are a powerful tool for forecasting and civic engagement, backed by academic research showing their value in aggregating information. They give regular people like me a stake in understanding public events. Please dont let a few potential bad actors ruin this for everyone. I ask the CFTC to support proportionate regulation that addresses specific risks while allowing these markets to thrive.
Thank you for considering my input.
Sincerely,
Michael Hindi
