Comment Text:
Dear Chairman and Commissioners,
My name is Sheldon Compton, and I'm a trader and investor based in California. I've been actively trading on prediction markets like Kalshi and Polymarket for a while now, and Im writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I strongly support the development of well-regulated prediction markets in the United States, and I want to share why I believe the CFTC should focus on proportionate regulation rather than restrictive bans or overreach.
For me, prediction markets aren't just a financial tool, they're a challenge. I enjoy the process of digging into data, analyzing trends, and creating better forecasts. These markets motivate me to stay informed about the world, whether it's politics, economics, or even weather events. The incentive to get it right, financially and intellectually, drives me to think critically. And I'm not alone. These platforms give regular people like me a chance to participate in markets that aggregate information in ways polls and pundits often can't match. That's a public good, not a problem to be stifled.
Im particularly concerned about the idea of classifying event contracts as "gaming" (as raised in Questions 15-22 of the ANPR). These contracts serve real economic purposes, like price discovery and hedging risks that matter to everyday life, such as policy changes or inflation data that could impact my investments. This isn't gambling any more than trading stocks or commodities is. It takes research and judgment, not blind luck. Labeling it as gaming risks pushing legitimate activity into unregulated, offshore platforms where theres no consumer protection at all. I'd much rather trade on a CFTC-regulated market like Kalshi than be forced to alternatives with no oversight. Regulation, not restriction, is the answer.
On the topic of manipulation and insider trading (Questions 29-32), I believe the CFTC already has strong tools to address these issues. Laws against market manipulation and insider trading apply across regulated markets, and they should be enforced here too. Creating broad bans or over-restrictive rules to stop a few bad actors punishes everyone else. It's like closing a highway because some people speed. Use the tools you have, don't shut down the road.
I also think the US has a chance to lead in financial innovation (relevant to Questions 7-14 on public interest). If we over-regulate or ban prediction markets, we risk ceding ground to other countries that are embracing these technologies. Let's not fall behind. Proportionate, targeted rules that address specific risks make more sense than categorical prohibitions.
I urge the CFTC to support the growth of regulated prediction markets with clear, fair guidelines. Don't let heavy-handed restrictions push activity offshore or limit access for regular traders like me. Thank you for considering my perspective.
Sincerely,
Sheldon Compton
