Comment Text:
Dear Chairman and Commissioners,
My name is Po Hao Chiu, and Im a Ph.D. candidate in Chemical Engineering based in Washington state. Im writing to comment on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. As a student with a strong interest in financial markets, I actively trade on platforms like Kalshi and Polymarket, and I strongly support the development of well-regulated prediction markets in the United States.
I got into prediction markets because I saw their potential to help me hedge personal financial risks. As someone studying a field tied to volatile industries like energy and manufacturing, Im constantly thinking about how policy changes or economic shifts could impact my future career or investments. Trading on Kalshi lets me hedge against uncertainties, like potential regulatory changes that could affect chemical engineering sectors or broader economic indicators that influence student loan rates and job markets. This isnt just playing a game. Its a practical tool for managing real risks, much like how people use futures or options in traditional markets.
I also want to stress that event contracts arent gambling. They serve genuine economic purposes, like price discovery and risk management. Academic research, which Im familiar with as a student, backs this up. Studies by economists like Justin Wolfers and Eric Zitzewitz show that prediction markets often outperform polls and pundits in forecasting accuracy. This data isnt just useful for traders; it benefits society by providing transparent, aggregated information about complex events. I think the CFTC should recognize this value when considering regulations, especially in response to questions 7 and 8 in your ANPR about public interest and price discovery.
Another reason I support regulated markets is safety. Platforms like Kalshi, which operate under CFTC oversight, are far more reliable than unregulated offshore sites like Polymarket. If the CFTC over-restricts or bans these markets, people like me wont stop trading; well just be pushed to less secure venues with no consumer protections. Id rather see the CFTC focus on proportionate rules that keep markets safe and accessible. On that note, addressing questions 29 and 30 about insider trading and manipulation, I believe the CFTC already has strong tools to tackle these issues in other derivatives markets. Those same mechanisms can be adapted here without resorting to broad prohibitions.
Im not blind to the risks. I know manipulation or insider trading could happen. But shutting down entire markets to stop a few bad actors feels like overkill. It punishes students and everyday folks who use these tools responsibly. Instead, I urge the CFTC to craft targeted regulations that address specific concerns while preserving the benefits of prediction markets for hedging and information sharing.
Thank you for considering my perspective. I hope the CFTC will support proportionate regulation of prediction markets and avoid overly restrictive measures that could harm innovation and access.
Sincerely,
Po Hao Chiu
