Comment Text:
Dear Chairman and Commissioners,
My name is Peter Lukacs, and I'm a trader and investor based in Colorado. I've been actively trading in financial markets for years, and more recently, I've been deeply involved in prediction markets like Kalshi. I'm writing to express my strong support for the proportionate regulation of prediction markets as outlined in your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets offer unique value to individuals like me, as well as to society at large, and I urge you to craft rules that protect consumers without stifling innovation or pushing activity offshore.
As a day trader, I see a lot of parallels between financial markets and prediction markets. Neither is inherently "fair" in the sense of everyone having equal outcomes, but that's not the same as abuse. Success in any market comes down to having the best information, the fastest tools, and the drive to keep innovating. Prediction markets are no different. Unlike traditional betting platforms where the house sets unfair odds to guarantee their profit, prediction markets let buyers and sellers determine the odds. This market-based system feels less predatory and offers real utility, whether it's for hedging personal or business risks or gaining insights that aren't available elsewhere. For instance, I've used Kalshi to hedge against economic events that could impact my investments, like interest rate decisions or inflation data releases. This kind of risk management is invaluable to someone like me.
I also want to address a key concern. Banning or over-restricting prediction markets won't eliminate them; it will just drive activity to unregulated offshore platforms where there are no consumer protections. I've seen enough in my trading career to know that regulated markets like Kalshi are far safer. They're transparent, monitored, and accountable in ways that offshore sites aren't. Plus, academic research has shown that prediction markets aggregate information efficiently, often producing more accurate forecasts than polls or pundits. Informed trading, even by those with an edge, improves price discovery and benefits everyone in the market, not just the traders.
I'm particularly interested in your questions under Topic B on Public Interest, specifically Question 7 about balancing innovation and consumer protection, and Topic E on Inside Information, like Question 29 about whether informed traders help price discovery. My view is clear: innovation and informed trading are strengths of prediction markets, and the focus should be on targeted rules to prevent manipulation or spoofing, not broad categorical bans. The CFTC already has tools to address abuse in other markets; adapt those here. A total ban or overly harsh restrictions would be a disservice to the industry and to traders like me who value the freedom to participate in legal, regulated markets.
I ask that you support measured regulation of prediction markets. Focus on preventing specific abuses like manipulation while preserving the ability of individuals and businesses to use these markets for hedging and insight. Don't let fear of a few bad actors punish the rest of us or push this activity into the shadows.
Thank you for considering my input.
Sincerely,
Peter Lukacs
