Comment Text:
Dear Chairman and Commissioners,
My name is Troy Howard, and I'm a trader and investor based in Kentucky. I've been actively trading on prediction markets like Kalshi for a while now, and I wanted to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I strongly support the idea of well-regulated prediction markets, and I hope the CFTC will craft rules that allow these markets to thrive while protecting consumers.
As someone who trades regularly, I value the freedom to participate in legal, regulated markets like Kalshi. These platforms aren't just a hobby for me. They provide unique information that helps with decision-making, whether it's about economic trends or political events. I've found the price discovery on prediction markets to be more reliable than many traditional sources like polls or pundits. This isn't just useful for traders like me; it benefits the public by offering better data for everyone to consider.
I also believe event contracts aren't gambling. They serve real economic purposes, like hedging risks or gaining insight into future outcomes. Classifying them as "gaming," as discussed in Questions 15-22 of the ANPR, ignores the research and judgment involved, much like any other investment. I often use these markets to balance risks tied to policy changes that could affect my portfolio. That's not a game; it's a practical tool.
I'm also concerned about what happens if the CFTC over-restricts or bans these markets. I've seen unregulated offshore platforms out there, and they're far riskier than a CFTC-registered market like Kalshi. Banning or heavily limiting prediction markets won't stop trading; it'll just push people like me to less safe venues with no oversight. On this point, I think Question 7 about balancing innovation and consumer protection is key. Regulation, not prohibition, is the way to keep consumers safe.
Another thing that worries me is the U.S. falling behind in financial innovation. We should be leading the way on new tools like prediction markets, not ceding ground to other countries. If we over-regulate, we'll lose that edge. I hope the CFTC considers this when looking at Questions 33-40 about classification and costs.
Finally, I know there are concerns about manipulation or insider trading, as raised in Questions 29-32. But the CFTC already has strong tools to tackle those issues in other derivatives markets. I trust those can be adapted here without shutting down an entire industry. Let's not punish honest traders for the actions of a few bad actors.
I urge the CFTC to support proportionate regulation of prediction markets. Please don't ban or over-restrict them. Allow platforms like Kalshi to operate under clear, fair rules that protect consumers and keep the U.S. competitive.
Sincerely,
Troy Howard
