Comment Text:
Dear Chairman and Commissioners,
My name is John Richert, and I'm a trader and investor based in Michigan. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing to express my strong support for well-regulated prediction markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide real value to people like me and to society as a whole, and I urge you to craft rules that support innovation while addressing risks proportionately.
As someone who trades regularly, I can tell you that prediction markets aren't just a hobby, they're a source of unique information. I've seen firsthand how the prices on platforms like Kalshi often predict outcomes more accurately than polls or TV pundits. Whether it's an election or an economic indicator, these markets cut through the noise and give me data I can't get elsewhere. That benefits everyone, not just traders. Beyond that, I use these markets to hedge real risks. For instance, I've traded contracts tied to economic data releases that could impact my investments. This isn't gambling, it's a practical tool, much like trading futures or options to manage uncertainty.
I also value the freedom to participate in legal, regulated markets. Platforms like Kalshi, under CFTC oversight, are transparent and safe. If you ban or over-restrict these markets, you're not stopping the activity, you're just pushing it to unregulated offshore platforms where there are no protections. I've seen what happens in other areas when the U.S. lags behind, and I don't want us to cede leadership in financial innovation to other countries. We should be setting the standard for how these markets operate, not driving them away.
I'm aware of concerns about manipulation or insider trading, and I get why those are issues. But the CFTC already has powerful tools to tackle fraud and manipulation in other derivatives markets. Those same tools can work here. Shutting down prediction markets to stop a few bad actors feels like punishing everyone for something that's already illegal. On this point, I'd like to address Questions 29-32 from your ANPR about inside information. Informed traders actually help make prices more accurate, and existing laws already bar federal employees from abusing nonpublic info. Focus on enforcement, not broad restrictions.
I also want to touch on Question 15 regarding whether event contracts are "gaming." They aren't. These contracts serve real economic purposes like hedging and price discovery, just like any other derivative. Labeling them as gambling misses the point of why people like me use them.
In closing, I ask you to support proportionate regulation of prediction markets. Don't ban or overly restrict them. Keep the U.S. competitive, protect traders with oversight, and let these markets continue to provide value. Thank you for considering my input.
Sincerely,
John Richert
