Comment Text:
Dear Chairman and Commissioners,
My name is Preston Chen, and I'm a software engineer based in California. I run a small website called statstacks.io where I create financial reports, often digging into data and trends to help make sense of markets and economic events. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my strong support for proportionate regulation of these markets, rather than overly restrictive rules or outright bans.
As someone who works in tech and deals with financial data, I've used prediction markets a few times to gain insights and manage personal financial risks. For instance, I've traded contracts tied to interest rate decisions to hedge against potential impacts on my savings and investments. These markets provide unique information that I can't find in traditional polls or news outlets, and they help me make better decisions. I believe this value extends beyond just me, as prediction markets aggregate knowledge in a way that benefits society as a whole. Informed trading, far from being a problem, actually improves price discovery, making the data more reliable for everyone, whether they trade or not.
I'm particularly concerned about U.S. competitiveness in financial innovation. If we over-regulate or ban prediction markets, we're just pushing activity to unregulated offshore platforms that lack oversight. I've looked at platforms like Kalshi, which operate under CFTC rules, and it's clear to me that regulated markets are far safer for participants. Why would we drive users to less secure venues when we can lead the world by fostering innovation here at home? The U.S. has the chance to set the standard for these markets, not cede ground to other countries.
I also want to address the hedging utility, which ties into your questions 7 through 14 on public interest. For someone like me running a small online business, prediction markets offer a real way to manage risks tied to economic or policy changes. A contract on a regulatory outcome or tariff decision could directly affect my costs and planning. This isn't gambling; it's a practical tool, much like any other derivative market.
On the topic of insider trading, as raised in questions 29 to 32, I understand the concern. But existing laws already prohibit federal employees and others from abusing nonpublic information, and the CFTC has tools to tackle manipulation. Banning these markets to stop a few bad actors would punish the rest of us who use them responsibly.
I urge you to support well-regulated prediction markets that allow everyday people like me to participate in legal, transparent platforms. Let's focus on targeted rules to address specific risks, not broad restrictions that stifle innovation and push activity offshore. Thank you for considering my perspective.
Sincerely,
Preston Chen
