Comment Text:
Dear Chairman and Commissioners,
My name is Chris O'Neill, and I'm a trader and investor based in Virginia. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I strongly support the development of well-regulated prediction markets, and I hope the CFTC will craft rules that encourage innovation while addressing real risks.
As someone who trades regularly, I've seen firsthand how prediction markets provide valuable information that you just can't find elsewhere. The forecasts on platforms like Kalshi for elections and other public events often cut through the noise of polls and pundits. I rely on this data not just for trading but to better understand what's likely to happen in the world. This kind of price discovery isn't just helpful to me; it benefits everyone, from policymakers to everyday citizens trying to make sense of complex issues. I believe the CFTC should recognize this public good when considering regulations, especially in response to questions 7 and 8 from the ANPR about balancing innovation with consumer protection.
I worry, though, about what happens if the CFTC over-restricts or bans these markets. If that happens, activity won't just stop. It'll move to unregulated offshore platforms where theres no oversight at all. I've seen how easy it is to access those sites, and they don't have the safeguards that a CFTC-registered market like Kalshi does. Shutting down legitimate markets here in the US would push people like me to riskier spaces. On top of that, the US should be leading the way in financial innovation. If we clamp down too hard, we're handing that leadership to other countries. I think the CFTC should consider this under questions 33 and 34 about classification and regulatory costs.
Instead of broad bans or categorical restrictions, I'm asking for proportionate regulation. Target the real issues like manipulation or insider trading with specific rules, not blanket prohibitions. The CFTC already has tools to handle bad actors in other markets, and those can be adapted here. I've read through some of the ANPR, and in response to question 15 about defining legitimate markets versus gaming, Id argue these contracts aren't gambling. They take research and judgment, just like trading stocks or futures. Treating them as gaming feels like a misstep.
I appreciate the CFTC taking the time to gather input before drafting rules. Prediction markets have real value, and I hope you'll support their growth with thoughtful, balanced regulation that keeps them safe and accessible here in the US. Please don't let over-restriction push this innovation offshore or out of reach for regular traders like me.
Thank you for considering my comments.
Sincerely,
Chris O'Neill
