Comment Text:
Dear Chairman and Commissioners,
My name is Ismael Orenstein, and I'm a trader and investor based in New York with years of experience in global markets. Ive worked with large U.S. financial institutions and pension funds, focusing on hedging exposures in foreign countries, and I currently trade actively on prediction markets like Kalshi and Polymarket. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my strong support for well-regulated prediction markets. I believe they provide unique value to individuals, businesses, and society as a whole.
In my career, I've seen how critical accurate information is for decision-making. Prediction markets stand out because they consistently produce forecasts that beat polls or pundits when it comes to elections and major public events. These platforms aggregate real-time insights from diverse participants, creating a clearer picture of whats likely to happen. Thats not just useful for traders like me; its valuable for policymakers, businesses, and the public who need reliable data to make informed choices. Ive relied on these markets myself to get a better read on political outcomes that affect global investments.
Beyond forecasting, prediction markets are a practical tool for hedging real risks. Early in my career, I worked on protecting institutional portfolios from political instability in foreign markets. Back then, we didnt have access to event contracts that could directly hedge against specific political risks. If prediction markets had been more developed and accessible, they could have saved us significant losses by allowing tailored protection against election outcomes or policy shifts abroad. Today, I use these markets to manage personal investment risks tied to U.S. events, and I know businesses could do the same for regulatory or economic uncertainties.
I also want to stress that event contracts are not gambling. They serve genuine economic purposes like price discovery and risk management, much like the derivatives Ive traded for years. Treating them as "gaming," as discussed in Questions 15-22 of the ANPR, misses their utility. These contracts require research and judgment, just like trading stocks or commodities. Calling this gambling would be like calling all investing a game of chance.
That said, I understand concerns about manipulation or insider trading, as raised in Questions 29-32. But the CFTC already has tools to combat these issues, and they should be enforced rather than banning or over-restricting markets. Shutting down prediction markets in the U.S. wont stop trading; itll just push activity to unregulated offshore platforms where theres less oversight and more risk. Were better off keeping these markets here under clear, proportionate rules.
I urge the CFTC to support innovation by crafting regulations that address specific risks without stifling the benefits of prediction markets. Theyre a powerful tool for forecasting and hedging, and the U.S. should lead in this space. Thank you for considering my perspective.
Sincerely,
Ismael Orenstein
