Comment Text:
Dear Chairman and Commissioners,
My name is Jimmy Villalba, and I'm a finance professional based in North Carolina. I've worked in finance for years, dealing with risk management and market analysis, and Ive come to rely on prediction markets as a valuable tool for both personal and professional reasons. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my strong support for well-regulated prediction markets and to urge the CFTC to avoid bans or overly restrictive rules.
I use prediction markets to hedge risks tied to political and economic events. For instance, during election cycles, the outcomes can directly impact tax policies or regulations that affect my clients investments or my own financial planning. Prediction markets give me a way to manage that uncertainty with data-driven insights. What sets these markets apart is their accuracy. Time and again, platforms like Kalshi have outperformed polls and pundits in forecasting election results and other public events. That kind of reliable information isnt just helpful to me; its a public good. It can inform better decision-making for everyone, from individual investors to policymakers.
Im also convinced that regulated markets are the way to go. Platforms like Kalshi, operating under CFTC oversight, offer transparency and accountability that you wont find on unregulated offshore sites. If the CFTC clamps down too hard or bans certain event contracts, people like me wont stop looking for ways to hedge risks or access this information. Well just end up on less safe, unregulated platforms outside U.S. jurisdiction. Thats a worse outcome for consumer protection and market integrity.
On specific concerns, like manipulation or insider trading, I believe the CFTC already has the tools to handle these issues. Your existing authority over market manipulation and fraud in other derivatives markets can easily apply here. Theres no need for broad prohibitions that punish legitimate users. Id encourage you to consider questions 7 and 29 from the ANPR, on balancing innovation with consumer protection and the role of informed traders in price discovery. Prediction markets thrive on aggregating diverse knowledge, and over-restricting them risks losing that benefit while pushing activity offshore.
I also want to highlight the real hedging utility for individuals and businesses, as raised in question 9. These markets arent gambling; theyre a practical way to offset risks from unpredictable events, much like futures or options in traditional markets. A heavy-handed approach would cut off access to a tool that helps people manage uncertainty in their lives.
I respectfully ask the CFTC to support proportionate regulation of prediction markets. Focus on targeted rules to address specific risks, and dont resort to bans or sweeping restrictions that would harm legitimate users and drive activity to less safe venues. Thank you for considering my input.
Sincerely,
Jimmy Villalba
