Comment Text:
Dear Chairman and Commissioners,
My name is Ryan Katayama, and I'm a healthcare professional based in California. I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I actively trade on regulated platforms like Kalshi, and I strongly support the development of well-regulated prediction markets in the United States.
As someone working in healthcare, I deal with uncertainty every day, whether it's about policy changes affecting my profession or economic shifts impacting my personal finances. Prediction markets have been a valuable tool for me to hedge against some of these risks. For instance, I've used Kalshi to trade on outcomes related to federal policy decisions that could affect healthcare regulations or funding, which directly ties to my livelihood. This isn't gambling; it's a practical way to manage real-world exposure, much like any other investment.
I believe the freedom to participate in legal, regulated markets is crucial. Platforms like Kalshi, under CFTC oversight, provide a safe and transparent space to trade event contracts. Banning or over-restricting these markets would only push activity to unregulated offshore platforms, where there's no accountability. I've seen how regulated markets work with clear rules, and I'd hate to see that undermined by driving users to less safe venues. The US should be leading in financial innovation, not handing the advantage to other countries.
I'm also convinced that prediction markets offer unique value to society. The forecasts they produce are often more accurate than polls or pundits, giving everyone, not just traders, better information to make decisions. Informed trading, even by those with deep knowledge, improves price discovery and benefits all participants. And let's be clear, event contracts aren't gaming. They serve legitimate purposes like hedging and information aggregation, just as futures or options do.
Regarding some of your specific questions, like those in Topic Area B on public interest (Questions 7-14), I urge you to prioritize innovation alongside consumer protection. The CFTC already has strong tools to tackle manipulation and insider trading, as noted in Topic Area A (Questions 1-6). Use those existing powers rather than imposing broad bans. On Topic Area C (Questions 15-22), I hope you'll avoid classifying event contracts as gaming, since they have clear economic utility. And for Topic Area E (Questions 29-32), recognize that informed trading can be a strength, not a flaw, for price accuracy.
I ask you to support proportionate, targeted regulation of prediction markets. Address specific risks without stifling the entire industry. Let's keep these markets accessible, safe, and innovative right here in the US.
Thank you for considering my input.
Sincerely,
Ryan Katayama
