Comment Text:
Dear Chairman and Commissioners,
My name is Claudio Garcia, and I'm a trader and investor from Missouri. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I strongly support the development of well-regulated prediction markets in the United States, and I hope my perspective as someone who uses these platforms can help inform your approach.
I rely on prediction markets not just as a way to invest, but as a source of information that I can't find anywhere else. I've seen firsthand how these markets often predict outcomes, like elections or economic events, with more accuracy than polls or pundits. That benefits everyone, not just traders like me. The prices reflect a collective wisdom that comes from people putting real money behind their research and judgment. It's not gambling; it's a serious process that involves analyzing data and understanding the world, much like trading stocks or commodities. Labeling event contracts as "gaming" would be a mistake when they serve real economic purposes, like price discovery and hedging risks.
I'm also concerned about U.S. competitiveness in financial innovation. We should be leading the way on new markets like these, not falling behind other countries. If we over-restrict or ban prediction markets, activity will just move to unregulated offshore platforms. I've seen those sites. They're far riskier, with no oversight to protect participants. Regulated markets like Kalshi, under CFTC supervision, are a much safer option. Pushing traders offshore by clamping down here would be counterproductive. We need the freedom to participate in legal, regulated markets without unnecessary barriers.
On the topic of informed trading, which I believe ties to your questions 29 through 32 in the ANPR, I think its a net positive. When people with good information trade, it makes the market prices more accurate, which helps everyone. Of course, insider trading by federal officials or others with nonpublic info is a concern, but it's already illegal. The CFTC has tools to enforce against manipulation and bad actors. Shutting down entire markets to stop a few cheaters would punish honest participants like me.
I urge you to support proportionate regulation of prediction markets. Please don't impose broad bans or overly restrictive rules that could stifle innovation or drive activity overseas. Focus on targeted solutions to specific risks while preserving the benefits these markets provide to traders, businesses, and the public. I'm happy to provide more input if needed, and I appreciate the chance to comment on this important issue.
Sincerely,
Claudio Garcia
