Comment Text:
Dear Chairman and Commissioners,
My name is Jacob McKay, and I'm a trader and investor from Louisiana. I'm writing to express my strong support for well-regulated prediction markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I've been actively trading on platforms like Kalshi and Polymarket for a while now, and I believe these markets provide real value, not just to me but to many others who need ways to manage financial risks.
As someone who spends a lot of time analyzing markets, I can tell you that prediction markets aren't just a game or a gimmick. They offer unique information you can't get from polls or news outlets. I've seen firsthand how their prices often predict outcomes better than so-called experts. But beyond that, what really matters to me is how these markets let individuals and businesses hedge against real-world uncertainties. For example, I run a small investment portfolio, and I've used prediction markets to offset risks tied to election outcomes that could impact tax policies or regulatory changes affecting my holdings. It's not gambling. It's a practical tool, much like trading futures or options to manage exposure.
I understand there are concerns about things like insider trading or market manipulation. I get it. Those are real issues. But the answer isn't to ban or over-restrict prediction markets. The CFTC already has rules and tools to go after bad actors, just like in other derivatives markets. Shutting down these platforms or making them too hard to access would hurt regular folks like me who use them responsibly. It would also push activity to offshore, unregulated sites where there's no oversight at all. I'd rather see the U.S. lead on this and keep things safe and transparent.
Regarding some of the specific questions in your ANPR, I want to address Question 10 under Public Interest. Prediction markets absolutely serve a purpose in risk management, similar to how other derivatives help people hedge. They let me protect against events that could hit my finances hard. And on Question 29 about inside information, I think informed traders actually make the market's predictions stronger. The focus should be on enforcing existing laws against misuse of nonpublic info, not blocking the whole market.
I'm asking you to support proportionate regulation of prediction markets. Don't ban or overly restrict them. Craft rules that target specific risks while letting these valuable tools remain accessible to everyday traders like me. They help us manage uncertainty in a world full of it, and that's worth protecting.
Sincerely,
Jacob McKay
