Comment Text:
Dear Chairman and Commissioners,
My name is Preston Block, and I'm a student from Iowa with a strong interest in economics and public policy. I've been actively trading on prediction markets like Kalshi for the past year, and I'm writing to express my support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to society, and I urge the CFTC to regulate them proportionately rather than imposing overly restrictive rules or bans.
As a student, Ive seen firsthand how prediction markets offer insights that polls and pundits often miss. For example, during the last election cycle, I relied on Kalshi's forecasts to better understand likely outcomes, and the market prices were consistently more accurate than many expert predictions. This kind of information isnt just useful for traders like me; it helps everyone, from journalists to policymakers, make better decisions. I also value the freedom to participate in legal, regulated markets. Banning or over-restricting these platforms would likely push activity to unregulated offshore sites, which lack the oversight and safety of CFTC-registered exchanges like Kalshi. Id much rather trade in a transparent, regulated environment.
Im also concerned about the idea of classifying event contracts as gaming. From my perspective, trading on prediction markets requires research and judgment, much like investing in stocks or commodities. Its not gambling; it serves real economic purposes like price discovery and forecasting. Academic research, which Ive studied in my courses, backs this up. Studies by economists like Justin Wolfers and Eric Zitzewitz show how these markets aggregate information efficiently. Plus, the data from prediction markets is transparent and publicly available, which benefits academic study and public decision-making.
Addressing some of the CFTCs specific questions, particularly in Topic Area B (Questions 7-14) on public interest and Topic Area C (Questions 15-22) on listed activities, I believe the Commission should recognize the public value of accurate forecasting and avoid labeling these contracts as gaming. On Topic Area E (Questions 29-32) regarding insider trading, I acknowledge the concern, but I think the CFTC already has strong tools to prevent manipulation and insider trading in other derivatives markets. These can be adapted here without broad bans. A targeted approach makes more sense.
The U.S. has a chance to lead in financial innovation with prediction markets. We shouldnt cede that to other countries by over-regulating. Im asking the CFTC to support proportionate rules that address specific risks while allowing platforms like Kalshi to operate. Lets keep these markets safe, accessible, and innovative for people like me who see their value every day.
Thank you for considering my input.
Sincerely,
Preston Block
