Comment Text:
Dear Chairman and Commissioners,
My name is Nathan Mason, and I'm a policy professional based in California. Im writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I actively trade on platforms like Kalshi, and I strongly support the development of well-regulated prediction markets in the United States. I believe they provide unique value to individuals, businesses, and society as a whole, and I urge the CFTC to craft rules that allow these markets to thrive without over-restrictive bans or barriers.
As someone who works in policy, I see firsthand how hard it is to get reliable information for decision-making. Prediction markets have consistently outperformed polls and pundits in forecasting outcomes, whether it's elections or economic indicators. The aggregated wisdom of traders offers insights I can't find elsewhere, and this isn't just useful for me as a trader, it's valuable for the public and policymakers too. Beyond that, these markets let everyday people like me hedge real risks. For instance, I've used Kalshi to offset uncertainties tied to policy changes that could impact my work or personal finances. This isn't gambling, it's a practical tool, much like any other derivative market.
Im also concerned about U.S. competitiveness. Prediction markets are a frontier of financial innovation, and if we ban or over-regulate them, we're just pushing activity to offshore platforms with less oversight. I've seen how unregulated spaces can harm consumers in other policy areas, and Id rather see the CFTC create a framework that keeps these markets safe and domestic. The U.S. should be leading on this, not ceding ground to other countries. Academic research backs this up as well. Studies by economists like Hanson and Wolfers show how these markets improve information transparency and price discovery, which aligns with my own experience trading.
Addressing some of your specific questions, like those in Topic Area B on public interest (Questions 7-14), I believe the CFTC should prioritize innovation while protecting consumers through targeted rules, not broad prohibitions. On Topic Area C (Questions 15-22), I urge you not to classify event contracts as gambling. They serve real economic purposes, like hedging and information aggregation, distinct from games of chance. And regarding concerns about manipulation or insider trading raised in Topic Area E (Questions 29-32), I acknowledge the risks, but the answer isn't to shut down markets. Existing laws already prohibit insider trading and market manipulation, and the CFTC has the tools to enforce them.
I respectfully ask that the CFTC support proportionate regulation of prediction markets. Please don't impose categorical bans or overly restrictive rules that would stifle this valuable tool. Let's keep these markets accessible, transparent, and safe under U.S. jurisdiction.
Sincerely,
Nathan Mason
