Comment Text:
Dear Chairman and Commissioners,
My name is David Yang, and I'm a student based in New York. I'm writing to express my strong support for the proportionate regulation of prediction markets as outlined in the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). As someone who actively trades on platforms like Kalshi, I've seen firsthand how these markets provide unique value, and I believe the CFTC should encourage their growth under a fair regulatory framework rather than imposing overly restrictive rules.
I got into prediction markets because I'm fascinated by how they aggregate information. Whether it's an election outcome or an economic indicator, the prices on these platforms often predict events more accurately than polls or pundits. I've used them to follow political races and even bet on inflation data releases, and I'm consistently impressed by how the crowd's collective judgment cuts through noise and bias. This isn't just useful for traders like me; it benefits everyone by providing clearer signals about the future. Society gains when information is more transparent, and I think the CFTC should recognize this public good when considering regulations under Topic B, especially Question 7 on balancing innovation and consumer protection.
I also want to push back on the idea that event contracts are gambling. Trading on these markets requires research and analysis, much like investing in stocks or futures. I'm not rolling dice; I'm making informed decisions based on data and news. Calling this gaming feels like a mischaracterization, and I hope the CFTC will define these contracts appropriately under Topic C, particularly Question 15 on distinguishing gaming from legitimate markets. These contracts serve real economic purposes, like price discovery, and they shouldn't be lumped in with pure chance games.
Another concern I have is maintaining US competitiveness in financial innovation. If we over-regulate or ban prediction markets, we'll drive activity to offshore platforms with no oversight. I'd much rather trade on a regulated US market like Kalshi, where there are protections in place. This ties into Question 33 under Topic F, about classification and costs. We should be leading the way in this space, not ceding it to other countries.
Lastly, on the issue of manipulation and insider trading, I believe the CFTC already has strong tools to address bad actors. Informed trading actually improves price discovery, which helps everyone, as discussed in Topic E, Question 29. Banning markets to stop a few bad apples punishes honest participants like me. Instead, focus on enforcing existing laws and adapting current safeguards to event contracts.
I urge the CFTC to support well-regulated prediction markets that allow everyday people to participate in legal, transparent platforms. Please avoid categorical bans or overly restrictive rules that could stifle this valuable tool. Thank you for considering my perspective.
Sincerely,
David Yang
