Comment Text:
Dear Chairman and Commissioners,
My name is Brandon Nalls, and I'm a software engineer from California. I work in tech, and I'm deeply passionate about mathematics, statistics, finance, and technology. That's why I'm writing to you about the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I've used platforms like Kalshi a few times, and I believe strongly that well-regulated prediction markets offer real value to people like me and to society at large. I urge you to support proportionate regulation rather than overly restrictive rules or bans.
As someone who geeks out on data and forecasting, I can tell you prediction markets are often more accurate than polls or pundits when it comes to elections and public events. They pull together information from all kinds of people, creating a clearer picture of what might happen. This isn't just helpful for traders; it benefits everyone who relies on good information, from journalists to policymakers. Beyond forecasting, these markets let me and others hedge real financial risks. For instance, I always invest in futures markets on California politicians through Kalshi. I know that when certain folks win, their policies often hurt our state and my quality of life. Being able to hedge against that kind of uncertainty is a practical tool, not a game.
I also want to push back on the idea that event contracts are gambling. All investments, whether stocks, ETFs, futures, or bonds, carry risk. Singling out prediction markets like Kalshi or Polymarket feels arbitrary and like government overreach. These contracts serve legitimate economic purposes, like hedging and price discovery. Informed trading actually makes prices more accurate, which helps everyone in the market. Calling this "gaming" ignores the research and judgment involved, just like any other investment.
I'm also worried about what happens if the CFTC over-restricts or bans these markets. Pushing activity to unregulated offshore platforms is far riskier than keeping it under your oversight on platforms like Kalshi. The US should be leading in financial innovation, not handing that edge to other countries. You already have strong tools to tackle manipulation and insider trading in other derivatives markets. Use those here instead of broad categorical bans. Targeted rules addressing specific risks make more sense, as you discuss in Questions 1-6 on core principles and Questions 33-40 on classification.
I get that there are concerns about manipulation or insider trading, but shutting down entire markets to stop a few bad actors punishes regular people like me who just want to participate in a legal, regulated space. Let's keep this fair and open. I strongly support the freedom to engage in these markets under smart, balanced regulation.
Thank you for considering my perspective. I hope you'll craft rules that allow prediction markets to thrive while addressing real risks with precision.
Sincerely,
Brandon Nalls
