Comment Text:
Dear Chairman and Commissioners,
My name is Isaac Fugenschuh, and I'm a trader and investor based in Colorado. 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 the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value, and I urge the CFTC to craft rules that support their growth while addressing real risks, rather than banning or overly restricting them.
As someone who trades regularly, I've seen firsthand how prediction markets offer insights you just can't find elsewhere. They're especially useful for forecasting elections and major public events, often outperforming polls or pundits. I rely on these markets to make informed decisions, not just for profit but to better understand the world around me. The data they generate isn't just for traders like me; it helps everyone, from journalists to policymakers, get a clearer picture of what's likely to happen. To me, that's a public good worth protecting.
I also want to stress that regulated platforms like Kalshi are a far safer option compared to unregulated offshore sites. I've looked at some of those offshore markets, and they lack the oversight and transparency that a CFTC-registered platform provides. If the CFTC bans or over-restricts prediction markets here, people like me won't just stop trading. We'll be pushed to those less safe, unregulated venues where there's no accountability. That doesn't protect anyone; it just creates more risk. Regulation, not prohibition, is the way to keep traders and the public safe.
Addressing some of the specific questions in the ANPR, I think Question 7 on balancing innovation and consumer protection hits the nail on the head. Prediction markets are innovative tools for price discovery and forecasting, and the CFTC should focus on rules that prevent manipulation or insider trading without stifling the whole industry. On Question 15, regarding what activities should be listed or restricted, I believe the focus should be on ensuring markets serve a legitimate economic purpose, like hedging or information aggregation, rather than broad categorical bans that could drive activity offshore.
I know there are concerns about things like insider trading or manipulation. I'm not blind to those risks, but the CFTC already has tools to tackle bad actors in other markets, and those can work here too. Banning these markets to stop a few cheaters punishes honest traders like me who use them responsibly. I urge you to develop proportionate regulations that address specific problems without shutting down the benefits prediction markets offer.
Thank you for considering my perspective. I strongly support the continued growth of well-regulated prediction markets in the United States.
Sincerely,
Isaac Fugenschuh
