Comment Text:
Dear Chairman and Commissioners,
My name is Joseph Eastep, and I'm a trader and investor from Ohio. I've been involved in various financial markets for year, and I've used prediction markets a few times to gain insight into events that impact my investments. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my support for well-regulated prediction markets. I believe they serve a valuable purpose and shouldn't be overly restricted or banned.
As someone who spends a lot of time analyzing markets, I can say that event contracts are not gambling. They have real economic value. When I trade on a prediction market, I'm not just tossing a coin or betting on a game. I'm researching, reading, and making judgments about real-world events, just like I do with stocks or commodities. For example, I've used these markets to get a sense of election outcomes that could affect tax policies impacting my portfolio. That kind of information isn't easy to find elsewhere, and it's often more accurate than polls or pundits. This isn't a game; it's a tool for understanding and managing risk.
I also want to stress that regulated markets, like Kalshi on a CFTC-registered platform, are far safer than the unregulated offshore alternatives. I've seen what happens when people get pushed to less transparent venues. Without oversight, there's no protection against fraud or manipulation. If the CFTC cracks down too hard or bans these markets, that's where activity will go. I'd much rather see the U.S. lead on this with sensible rules that keep things fair and above board. Regulating these markets keeps participants like me safer and ensures the information they produce stays reliable.
Regarding some of the specific questions in the ANPR, I think Question 8 about balancing innovation and consumer protection hits the nail on the head. Prediction markets are innovative, and they democratize access to information. Regular folks like me can participate, not just big institutions. But I get the concern about bad actors. My take on Question 29, about inside information, is that the CFTC already has tools to tackle insider trading and manipulation. Those laws apply to all markets, and they should be enforced here too. Banning prediction markets to stop a few cheaters is like shutting down the stock market over insider trading. It punishes the wrong people.
I'm asking you to support proportionate regulation of prediction markets. Don't ban or over-restrict them. Focus on targeted rules to address specific risks while letting these markets provide the unique value they offer. Thank you for considering my perspective.
Sincerely,
Joseph Eastep
