Comment Text:
Dear Chairman and Commissioners,
My name is Damian Mark, and I'm a lawyer based in Maryland. I'm writing to provide input on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I strongly support the development of well-regulated prediction markets under the CFTC's oversight, and I appreciate the chance to share my perspective as someone who uses these markets for practical financial purposes.
As a legal professional, I often deal with clients who face uncertainty due to political or economic events, such as changes in tax policy or regulatory shifts. I've personally turned to prediction markets to hedge risks tied to these kinds of outcomes. This isn't speculation or gambling. It's a calculated way to protect myself from volatility that traditional markets don't always address. I believe many others, from small business owners to individuals with personal financial exposure, could benefit from similar tools if these markets are properly regulated.
I want to stress two points. First, prediction markets serve a real economic purpose by allowing individuals and businesses to hedge against risks that aren't easily covered by other financial instruments. A farmer worrying about crop policy changes or a retailer concerned about tariff hikes can use these markets to offset potential losses. This isn't just useful for me; it's valuable for society as a whole since it stabilizes personal and business finances during uncertain times. Second, regulated markets like Kalshi, operating under CFTC oversight as a designated contract market, are far safer than unregulated offshore platforms. If the CFTC imposes overly restrictive rules or bans certain contracts, activity will just move to less transparent, riskier venues outside U.S. jurisdiction. That helps no one.
I urge the CFTC not to broadly classify event contracts as "gaming." Hedging real risks, as I do, is distinct from gambling and deserves recognition as a legitimate financial activity.
I respect the CFTC's need to prevent abuse in these markets, but banning or over-restricting them isn't the solution. Insider trading and manipulation are already illegal, and the CFTC has the authority to enforce those laws. Punishing legitimate users by shutting down access would be a mistake. I ask that you support proportionate regulation of prediction markets, ensuring they remain accessible for hedging and risk management while addressing specific risks with focused rules.
Thank you for considering my comments.
Sincerely,
Damian Mark
