Comment Text:
Dear Chairman and Commissioners,
My name is David Iba, and Im a small business owner from New York running a trading firm. Im writing to comment on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I strongly support the proportionate regulation of prediction markets and believe they offer real value to individuals, businesses, and the broader economy.
As someone who actively trades on regulated platforms like Kalshi, Ive seen firsthand how prediction markets provide unique information and risk management tools. My firm employs American workers, and without access to legal, regulated markets here in the US, their livelihoods would be at risk. Wed have no choice but to move operations overseas to access offshore platforms, which are far less safe and lack oversight. Regulated markets keep activity here, under CFTC supervision, where consumer protections can actually be enforced. Banning or over-restricting these markets would just push people to unregulated alternatives, which helps no one.
Prediction markets arent gambling, plain and simple. They serve real economic purposes, like helping me hedge risks tied to political or economic events that could impact my business. Whether its an election outcome affecting tax policy or a Federal Reserve decision influencing interest rates, these contracts let me manage uncertainty in a way that traditional investments often cant. Academic research backs this up, showing how prediction markets aggregate information efficiently and produce forecasts more accurate than polls or pundits. That benefits everyone, not just traders.
I also want to address concerns raised in your questions, particularly around manipulation and insider trading (Questions 29-32 in Topic E). I get the worry about bad actors, but the CFTC already has strong tools to tackle fraud and manipulation in other derivatives markets. Those can be adapted here without resorting to broad bans. Informed trading actually improves price discovery, making markets more accurate for all participants. And lets be honest, banning markets doesnt stop insiders, it just punishes legitimate users like me. As for public interest (Questions 7-14 in Topic B), the US should lead in financial innovation, not cede ground to other countries. Proportionate, targeted rules address specific risks better than sweeping restrictions.
I urge you to support well-regulated prediction markets that allow businesses and individuals to participate legally and safely. Dont let over-regulation or outright bans drive activity offshore. Keep the US competitive and protect consumers by building on the strong oversight you already have.
Thank you for considering my input.
Sincerely,
David Iba
