Comment Text:
Dear Chairman and Commissioners,
My name is Joseph Charon, and I'm an everyday citizen from Massachusetts. I'm writing to you about the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've been actively trading on platforms like Kalshi for a while now, and I strongly support well-regulated prediction markets. I believe they provide unique value to people like me and to society as a whole, and I want to share my thoughts on why the CFTC should regulate them proportionately rather than restrict or ban them.
I first got into prediction markets because I wanted better information about elections and other public events. Polls and pundits often get things wrong, but the prices on these markets seem to cut through the noise. I've seen firsthand how they often predict outcomes more accurately than traditional sources. This isn't just useful for traders like me, it's valuable for anyone who wants a clearer picture of what's likely to happen, whether it's journalists, policymakers, or just regular folks trying to make sense of the world.
Beyond forecasting, I value the freedom to participate in legal, regulated markets like Kalshi. These platforms are transparent and safe, unlike unregulated offshore sites where there's no oversight. If the CFTC over-restricts or bans prediction markets here, people won't just stop trading, they'll move to those riskier offshore platforms. That doesn't protect anyone, it just pushes the activity out of reach of US regulators. I'd much rather see the US lead in financial innovation and set the standard for how these markets should work, rather than cede that ground to other countries.
I also think event contracts serve real economic purposes, like helping individuals and businesses hedge against risks. For example, I've used markets to hedge uncertainty around policy changes that could impact my personal finances. This isn't gambling, it's a practical tool, and it shouldn't be classified as "gaming." Treating it that way ignores the research and judgment that goes into trading, much like any other investment.
Looking at some of the specific questions in the ANPR, I want to address a few points. On Question 7 under Public Interest, I believe prediction markets do serve the public good through better price discovery and risk management. On Question 15 under Listed Activities, I urge you not to lump event contracts under gaming, as they have legitimate uses. And on Question 33 under Classification, I think the focus should be on fitting these contracts into existing frameworks like futures, not creating overly restrictive new categories.
I understand there are concerns about manipulation or insider trading, but those are already illegal under existing laws, and the CFTC has the tools to enforce them. Banning or heavily restricting these markets punishes honest participants like me instead of targeting bad actors. I respectfully ask that the CFTC support proportionate regulation of prediction markets, ensuring they remain accessible on regulated platforms while addressing specific risks with targeted rules.
Thank you for considering my perspective.
Sincerely,
Joseph Charon
