Comment Text:
Dear Chairman and Commissioners,
My name is Tate Rountree, and Im a legal professional based in California. Im writing to provide my input on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. As a legal professional, I have a keen interest in how financial tools like prediction markets can inform public decision-making and help mitigate risks, and I actively trade on regulated platforms like Kalshi. I strongly support the proportionate regulation of these markets and urge the CFTC to avoid overly restrictive rules or broad bans that could undermine their value.
Prediction markets offer something unique: real-time data that often outpaces polls or pundits in accuracy. Ive relied on platforms like Kalshi to forecast outcomes of elections and other public events, and the insights I gain are more reflective of current sentiment than traditional surveys. This isnt just useful for me personally; its valuable for society at large, providing better information for decision-making and price discovery. Beyond forecasting, these markets allow me to hedge financial risks tied to political or economic events that could impact my work or personal finances. This isnt gambling. Its a legitimate economic tool, much like trading stocks or commodities, requiring research and judgment.
Im concerned, though, about the potential to push this activity offshore or into unregulated spaces. In law school, I saw how banning or over-restricting legitimate markets often drives behavior into the black market, where theres no consumer protection at all. Regulated platforms like Kalshi, under CFTC oversight, are far safer than offshore alternatives. The U.S. has a chance to lead in financial innovation here, and I believe we should seize it, not cede ground to other countries with looser rules.
Turning to specific questions in the ANPR, Id like to address Question 8 under Public Interest, regarding the balance between innovation and consumer protection. Regulation should focus on targeted measures to prevent manipulation or insider trading, using the CFTCs existing authority, rather than broad categorical prohibitions. On Question 15 under Listed Activities, I urge the CFTC to avoid classifying event contracts as gaming. These contracts serve real economic purposes, like hedging and price discovery, and should be treated accordingly. Finally, on Question 33 regarding classification, I believe event contracts should be regulated as derivatives with proportionate rules, not burdened with frameworks that dont fit their purpose.
I recognize there are valid concerns about manipulation or misuse, but the answer isnt to shut down these markets. The CFTC already has tools to address bad actors, and those should be enforced rigorously without punishing the broader public who benefit from access. Please support a regulatory framework that allows prediction markets to thrive under clear, fair oversight. Dont let over-restriction drive this innovation offshore.
Thank you for considering my perspective.
Sincerely,
Tate Rountree
