Comment Text:
Dear Chairman and Commissioners,
My name is Jaden Davidson, and I'm a trader and investor based in New York. I'm relatively new to prediction markets, but I've quickly come to see their value, both for me personally and for society at large. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my strong support for well-regulated prediction markets and to urge the CFTC to adopt a balanced, proportionate approach to regulation.
As someone who spends a lot of time analyzing markets, I appreciate how prediction markets provide unique information that you just can't find in polls or pundit opinions. The prices reflect real-time, crowd-sourced insights on everything from election outcomes to economic indicators. That kind of data doesn't just help traders like me, it also benefits the public, media, and even policymakers who need accurate forecasts to make better decisions. Academic research backs this up, showing how these markets aggregate information efficiently. I believe the US should be leading the charge in financial innovation like this, not falling behind other countries by over-restricting a promising tool.
I also want to stress that event contracts are not gambling. They serve real economic purposes, like hedging risks or discovering prices for uncertain events. Calling them "gaming" would be like calling stock trading gaming, and it misses the point of the research and judgment that goes into these trades. Plus, informed trading in these markets actually improves price discovery, which helps everyone, not just participants. I'm all for consumer protection, but the answer isn't to ban or overly restrict these markets. Regulated platforms like Kalshi, under CFTC oversight, are far safer than pushing activity to unregulated offshore sites where there's no accountability.
On that note, I'm glad the CFTC already has strong tools to tackle manipulation and insider trading in other derivatives markets. Those same tools can work here without resorting to broad categorical bans. I think the focus should be on targeted rules that address specific risks, as asked in Questions 7 and 33 from your ANPR. How can we balance innovation with protection? By keeping markets open to regular folks like me while enforcing existing laws against bad actors. And in response to Question 15, I urge you not to classify event contracts as gaming, but to recognize their legitimate role in the economy.
I just want the freedom to participate in legal, regulated markets that provide real value. Please support proportionate regulation of prediction markets and avoid heavy-handed restrictions that could stifle innovation or push activity overseas. Thanks for considering my perspective.
Sincerely,
Jaden Davidson
