Comment Text:
Dear Chairman and Commissioners,
My name is Hilton Sesay, and I'm an everyday citizen from Virginia writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. Ive been following prediction markets for a while now, though I dont trade on them myself. Im really interested in how they can provide better information about elections and other public events, and I believe they have a valuable role to play if regulated properly.
I support well-regulated prediction markets because they offer something unique. From what Ive seen, their forecasts are often more accurate than polls or pundits. That kind of insight isnt just helpful for traders; its useful for everyone, including regular folks like me who want to understand whats likely to happen in politics or the economy. Plus, I think its important that these markets let everyday people participate. If only big institutions can get in, all that valuable information stays locked away from the rest of us. That doesnt seem fair.
I also believe prediction markets arent gambling. Theyre about research and judgment, just like investing in stocks. Calling them "gaming" feels wrong when they serve real purposes, like helping people and businesses hedge against risks. For example, a small business owner could use these markets to protect against policy changes after an election, or someone could hedge personal finances against inflation data. Thats not a game; its practical.
On the flip side, I get the concerns about manipulation or insider trading. But the CFTC already has strong tools to deal with those issues in other markets. Why not adapt those same tools here instead of banning or over-restricting prediction markets? If we push too hard with broad bans, people will just turn to unregulated offshore platforms, which are way riskier. Id much rather see a regulated market like Kalshi, under CFTC oversight, than have activity go somewhere with no consumer protections.
Id like to touch on a couple of specific questions from the ANPR. Regarding Question 15 on defining gaming versus legitimate markets, I strongly feel event contracts serve economic purposes like price discovery and hedging, not entertainment. And on Question 7 about balancing innovation and consumer protection, I think proportionate regulation is the way to go. Target the real risks with specific rules, dont just shut down entire categories. That also ties into Question 33 on classification. These contracts shouldnt be mislabeled in ways that over-burden them; theyre tools for information and risk management.
I also worry that over-restricting prediction markets could hurt U.S. competitiveness in financial innovation. We should be leading on this, not letting other countries take over. Regulated markets are the answer, not bans.
In closing, I urge the CFTC to support proportionate regulation of prediction markets. Focus on targeted rules to address specific risks, and dont let broad restrictions push activity offshore or limit the benefits these markets can bring to people like me. Thank you for considering my input.
Sincerely,
Hilton Sesay
