Comment Text:
Dear Chairman and Commissioners,
My name is Waleed Malik, and Im a trader and investor based in New York. I work as a market maker, providing liquidity for various prediction markets, including platforms like Kalshi, which I actively trade on. Im writing to express my strong support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets serve valuable economic purposes and should not be overly restricted or banned.
As someone who spends my days analyzing and trading event contracts, I can tell you firsthand that this isnt gambling. Its about research, judgment, and understanding real-world events, much like trading stocks or commodities. Ive used prediction markets to hedge personal financial risks tied to things like election outcomes that could impact tax policies affecting my income, or economic data releases that influence my broader investments. These markets also provide unique information. Ive seen how their forecasts on elections or public events often beat polls or pundits in accuracy. Thats not just helpful for traders like me, its useful for businesses, policymakers, and everyday people trying to make informed decisions.
Im particularly concerned with the idea of broad categorical bans or heavy restrictions, as discussed in some of your questions, like those in Topic Area C (Questions 15-22) about defining gaming versus legitimate markets. Prediction markets arent games, theyre tools for price discovery and risk management. Shutting them down or over-regulating them wont stop people from trading, itll just push activity to unregulated offshore platforms where theres no consumer protection. Id much rather trade on a CFTC-regulated market like Kalshi, where I know there are safeguards in place, than deal with some sketchy overseas site. The US has a chance to lead in financial innovation here. Why cede that to other countries?
I also want to address concerns around manipulation and insider trading, as raised in Topic Area E (Questions 29-32). I get that these are real risks, but the CFTC already has strong tools to tackle them in other derivatives markets. Use those existing powers to target bad actors instead of punishing everyone with blanket restrictions. Plus, informed trading often improves price discovery, which benefits all participants, not just the traders with the best info. Banning markets to stop a few cheaters is like closing the stock exchange over insider trading scandals. Its not the right fix.
I urge you to focus on proportionate, targeted regulation that addresses specific risks without stifling these markets. Let individuals and businesses continue to hedge real risks and access better information through regulated platforms. Keep the US at the forefront of financial innovation and protect consumers by ensuring activity stays onshore under your oversight. Thank you for considering my input.
Sincerely,
Waleed Malik
