Comment Text:
Dear Chairman and Commissioners,
My name is Ethan Joslin, and I'm a trader and investor from the United States. I've been following financial markets for years, and while I don't currently trade on prediction markets, I've watched them closely and believe they serve a vital purpose. 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 rely on accurate information to make sound investment decisions, and prediction markets consistently provide forecasts that outpace polls or pundits, especially for elections and major public events. I've seen firsthand how these platforms aggregate diverse opinions into prices that often predict outcomes better than traditional sources. This isn't just useful for traders like me; it benefits the public, policymakers, and anyone who needs reliable data to navigate uncertainty. I also believe these markets help individuals and businesses hedge real financial risks, like policy changes or economic shifts that could impact investments or personal finances.
What draws me to prediction markets is the freedom to participate in legal, regulated platforms. Companies like Kalshi, operating under CFTC oversight, offer a safer and more transparent alternative to unregulated offshore sites. If we over-restrict or ban these markets, activity will just move to less safe venues, undermining consumer protection. The U.S. has a chance to lead in financial innovation here. We shouldn't cede that ground to other countries by stifling a growing industry with heavy-handed rules.
I also want to address some of the CFTC's specific questions from the ANPR. On Questions 7-14 under Public Interest, I believe prediction markets clearly serve the public good through better price discovery and risk management. The data they produce is a public resource, and informed trading only improves that accuracy, benefiting everyone, not just participants. Regarding Questions 29-32 on Inside Information, I think informed traders enhance price discovery, and existing laws already prohibit insider trading by federal officials or others with nonpublic information. The CFTC should focus on enforcing those rules, not banning entire markets.
I understand concerns about manipulation or misuse, but the answer isn't to shut down prediction markets. Your agency already has tools to combat fraud and manipulation in other derivatives markets. Adapt those for event contracts instead of imposing broad prohibitions that punish legitimate participants.
Prediction markets aren't gambling; they're a tool for forecasting and hedging, backed by solid academic research showing their value in aggregating information. I urge you to support proportionate regulation that addresses specific risks without stifling innovation or access. Let's keep the U.S. at the forefront of financial markets while ensuring safety and transparency.
Thank you for considering my perspective.
Sincerely,
Ethan Joslin
