Comment Text:
Dear Chairman and Commissioners,
My name is Marcello Koja, and I'm a student from Michigan with an academic interest in markets and data. I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I've used prediction markets a few times myself, and I strongly support their regulation in a way that allows ordinary people like me to participate while keeping these platforms safe and transparent.
As a student, I value the unique information that prediction markets provide. I've seen firsthand how their forecasts often beat polls or pundit opinions when it comes to predicting election outcomes or economic trends. This isn't just useful for traders; it helps everyone, from policymakers to regular citizens, make better-informed decisions. I also believe these markets give people a chance to hedge real risks. For example, a small business owner might use them to offset uncertainty around policy changes, or someone like me could hedge against economic shifts that impact student loans or job prospects.
I'm particularly concerned about the idea of banning or over-restricting these markets. If that happens, activity will just move to unregulated offshore platforms, which are far riskier for everyone involved. Regulated markets like Kalshi, under CFTC oversight, are a much safer option. They provide accountability and protections that you won't find in some sketchy overseas app. Plus, the CFTC already has strong tools to tackle manipulation and insider trading in other derivatives markets. I trust those same tools can work here without shutting down an entire industry. I also think the U.S. should lead in financial innovation. If we over-regulate, we risk losing ground to other countries that are more open to new ideas.
Looking at some of the specific questions in the ANPR, I want to address a few points. On Questions 7 and 8 under Public Interest, I believe prediction markets serve a clear public good through price discovery and risk management. They shouldn't be treated as gambling when they offer real economic value. On Question 29 regarding inside information, I think informed traders actually improve price accuracy, and existing laws already ban federal officials from misusing nonpublic information. We don't need to punish everyone by restricting access. Finally, on Question 35 about regulatory costs, I urge the CFTC to consider the cost of driving activity offshore by over-regulating. That would hurt U.S. competitiveness and data transparency, which is something I care about deeply as someone in academia.
I hope the CFTC will support proportionate regulation that lets prediction markets thrive while addressing specific risks with targeted rules. Please don't ban or overly restrict them. Thank you for considering my perspective.
Sincerely,
Marcello Koja
