Comment Text:
Dear Chairman and Commissioners,
My name is Mody Abraham, and I'm a student from Tennessee with a strong interest in economics and public policy. I'm writing to express my support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). As someone who actively trades on platforms like Kalshi and Polymarket, I've seen firsthand the value these markets provide, and I believe the CFTC has an opportunity to craft rules that encourage innovation while protecting consumers.
Prediction markets aren't just a hobby for me; they're a tool for understanding the world. I've used them to follow elections and major public events, and I'm consistently impressed by how their forecasts often beat out traditional polls or pundit predictions. As a student, I rely on accurate data to inform my studies and research, and these markets aggregate information in a way nothing else does. The prices reflect a collective wisdom that benefits everyone, not just traders like me. I also believe that informed trading, where people bring their knowledge to the table, actually improves price discovery. This isn't a flaw; it's a strength that makes the markets more reliable for all participants.
I understand there are concerns about manipulation or insider trading, and I agree those issues need addressing. But the answer isn't to ban or overly restrict prediction markets. Broad categorical bans would push activity to unregulated offshore platforms, which are far riskier for consumers like me. Instead, I urge the CFTC to focus on proportionate, targeted regulations that address specific risks. The CFTC already has tools to combat manipulation and fraud in other derivatives markets, and I believe those can be adapted here. I also want to stress that event contracts aren't gambling. They serve real economic purposes, like hedging risks or providing data for decision-making, much like other financial instruments.
Regarding some of the specific questions in the ANPR, I think Question 7 on balancing innovation and consumer protection is critical. Regulated markets are safer than offshore alternatives, and the US should lead in this space. On Question 15, about defining "gaming," I strongly feel that prediction markets shouldn't be lumped in with gambling; their purpose is distinct. And for Question 29, on inside information, I believe informed traders often improve market accuracy, as long as existing laws against insider trading are enforced.
I hope the CFTC will support the growth of prediction markets with fair, focused rules. Don't let broad restrictions stifle their potential or push users like me to less safe platforms. Thank you for considering my perspective.
Sincerely,
Mody Abraham
