Comment Text:
Dear Chairman and Commissioners,
My name is Harry Davis, and I'm a trader and investor based in Utah. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing to express my strong support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide real value to people like me, as well as to the broader public, and I urge the CFTC to craft rules that protect consumers without stifling innovation.
As a trader, I rely on prediction markets to hedge personal and financial risks. For instance, I've used platforms like Kalshi to offset potential impacts of election outcomes or economic data releases, like CPI numbers, that could affect my investments or business planning. This isn't gambling. It takes research and judgment, just like trading stocks or futures. Classifying event contracts as "gaming" ignores their legitimate economic purpose, whether it's hedging or price discovery. I also find the information these markets generate to be incredibly useful. The prices often reflect a clearer picture of likely outcomes than polls or pundits, and that benefits not just traders but anyone making decisions based on public events.
I'm particularly concerned about the risk of over-restriction or outright bans. If the CFTC makes it too hard to trade on regulated platforms like Kalshi, people will just turn to unregulated offshore sites. I've seen those platforms. They're far less safe, with no oversight or consumer protections. Regulated markets in the US are the better option, hands down. Plus, the US should be leading the way in financial innovation, not letting other countries take the reins. We can't afford to fall behind.
I also want to address some of the specific questions in the ANPR. On Questions 7-14 about public interest, I believe prediction markets serve the public good by improving price discovery and offering tools for risk management. On Questions 29-32 regarding inside information, I think informed trading actually helps make prices more accurate, benefiting everyone. And let's be clear, the CFTC already has strong tools to tackle manipulation and insider trading in other derivatives markets. Those can be adapted here without resorting to broad bans. Targeted, proportionate regulation is the way to go, not sweeping categorical restrictions.
I understand the need to protect consumers and prevent abuse, but punishing law-abiding traders like me by over-restricting these markets isn't the answer. Use the authority you have to go after bad actors, and keep these markets accessible to regular people. I strongly urge the CFTC to support well-regulated prediction markets with rules that balance innovation and protection.
Thank you for considering my input.
Sincerely,
Harry Davis
