Comment Text:
Dear Chairman and Commissioners,
My name is James Smith, and I'm a trader and investor from Vermont. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I'm new to prediction markets, just starting to experiment with them, but I strongly support their development under fair and proportionate regulation. I'm not a big player by any means, just a regular guy trying to build a solid portfolio, especially for hedging purposes, and I believe these markets can be a valuable tool for people like me.
As someone low on the totem pole, I see prediction markets as a way to level the playing field. They give me access to information and opportunities that I wouldn't get otherwise. I use platforms like Kalshi, and I think regulated markets are far safer than unregulated offshore ones. If the CFTC bans or over-restricts these markets, it won't stop trading, it will just push people like me to less safe, less transparent platforms outside the US. That hurts small traders who want to play by the rules. I also worry about the US falling behind in financial innovation. We should be leading the way, not handing the advantage to other countries.
I want to hedge personal and business financial risks, and prediction markets let me do that in a way traditional investments sometimes can't. Whether it's an election outcome affecting my taxes or a policy change impacting my small investments, these contracts help me manage uncertainty. I don't see this as gambling at all. It takes research and judgment, just like trading stocks or commodities. Classifying event contracts as "gaming" feels wrong to me, they serve real economic purposes like price discovery and risk management. I'd urge the CFTC to consider this in response to Questions 15-22 on listed activities.
On the topic of regulation, I'm all for rules that target specific risks like manipulation or insider trading, but broad categorical bans would be a mistake. Proportionate regulation, as discussed in Questions 7-14 on public interest, makes more sense. It protects consumers without killing innovation. Also, a note to platforms like Kalshi, I'd appreciate better notification response times and more predictable statistics to help new traders like me navigate the process. Maybe even a small fee for educational resources or tips for success could go a long way.
I respectfully ask the CFTC to support well-regulated prediction markets with targeted rules, not heavy-handed restrictions or bans. Let's keep these markets accessible, safe, and innovative for everyday Americans like me.
Sincerely,
James Smith
