Comment Text:
Dear Chairman and Commissioners,
My name is Drew Hathaway, and I'm a trader and investor from Indiana. I've been actively trading on prediction markets like Kalshi for years, wagering tens of thousands of dollars over that time. Through this experience, I've learned a lot about how these markets work, and I strongly support the CFTC crafting proportionate regulations for event contracts as outlined in the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I'm writing to share why I believe these markets are valuable and why over-restricting them would be a mistake.
Prediction markets aren't just a hobby for me; theyre a tool. I've used them to hedge personal financial risks tied to election outcomes and other public events that could impact my investments or tax situation. This isn't gambling, it's a way to protect myself with research and judgment, much like trading stocks or commodities. Beyond my own use, I see how these markets provide unique information. Their forecasts on elections and other events often beat polls and pundits, giving better data for everyone, not just traders. That kind of price discovery helps the public and even policymakers make informed decisions.
Im concerned, though, about the risk of over-regulation or outright bans. If the CFTC restricts prediction markets too much, people like me will just turn to offshore platforms with no oversight. Thats less safe for consumers and hurts US competitiveness. America should be leading in financial innovation, not handing that advantage to other countries. Regulated markets like Kalshi are the answer, not prohibitions that push activity underground. I also think theres room for improvement in how these markets reward participants. The financial returns on wagers can feel unfair or unsatisfying at times. Perhaps the CFTC could consider incentives, like a percentage increase on returns for wagers above a certain amount, to make participation more equitable and life-changing for everyday traders.
Addressing some of your specific questions, like those in Topic B on public interest (Questions 7-14), I believe prediction markets balance innovation with consumer protection when regulated properly. They offer real economic value through hedging and forecasting, as Ive experienced firsthand. On Topic C (Questions 15-22), I urge you not to classify event contracts as gaming; they serve legitimate purposes, unlike pure chance-based betting. And regarding Topic E on inside information (Questions 29-32), I trust the CFTCs existing tools to tackle manipulation and insider trading without banning entire markets.
I know there are concerns about bad actors or misuse, and those shouldnt be ignored. But the solution isnt shutting down prediction markets; its using the laws and powers you already have to target specific risks. I ask that the CFTC support well-regulated prediction markets with rules that protect consumers while preserving access for traders like me. Lets keep this innovation alive and thriving in the US.
Sincerely,
Drew Hathaway
