Comment Text:
Dear Chairman and Commissioners,
My name is Yi Zheng, and I'm a trader and investor based in Missouri. 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 they are valuable, both to me personally and to society as a whole.
As a trader, I've seen firsthand how prediction markets provide information that you just can't get from polls or pundits. The prices on these platforms often predict outcomes more accurately, whether it's an election result or an economic indicator like a CPI report. This isn't just helpful for those of us trading; its useful for the public, journalists, and even policymakers who need reliable signals to make decisions. Beyond that, these markets let me hedge real risks. For instance, Ive used event contracts to offset potential losses tied to policy changes that could impact my investments. This isn't gambling. Its a thoughtful process of research and judgment, much like trading stocks or commodities. Classifying these contracts as "gaming" would be a mistake, as they serve genuine economic purposes like price discovery and risk management.
I also worry about what happens if the CFTC over-restricts or bans these markets. I've traded on unregulated offshore platforms like Polymarket, and I can tell you theyre far riskier than a regulated market like Kalshi, which operates under CFTC oversight. If we push this activity offshore, we lose transparency and safety for American participants. The U.S. should be leading in financial innovation, not ceding ground to other countries. We have a chance to set the global standard here, and I hope we take it.
Addressing some of your specific questions, like those in Topic Area B (Questions 7-14) on public interest, I believe the benefits of innovation and price discovery outweigh the risks when markets are properly regulated. On Topic Area E (Questions 29-32) about inside information, I think informed trading actually improves price accuracy and benefits everyone in the market. And lets be honest, the CFTC already has strong tools to tackle manipulation and insider trading in other derivatives markets. Use those tools, dont just ban entire categories of contracts. Targeted, proportionate regulation makes more sense than broad restrictions, as discussed in Topic Area D (Questions 23-28).
I urge you to support the growth of prediction markets with sensible rules that protect participants without stifling opportunity. Lets keep these markets legal, regulated, and accessible to everyday traders like me. Thank you for considering my perspective.
Sincerely,
Yi Zheng
