Comment Text:
Dear Chairman and Commissioners,
My name is Evan Ferretti, and I'm a trader and investor from Pennsylvania. I've been actively trading on prediction markets like Kalshi for a while now, and I wanted to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I strongly support the development of well-regulated prediction markets, and I hope the CFTC will craft rules that encourage innovation while addressing real risks in a targeted way.
As someone who trades regularly, I've seen firsthand how prediction markets provide information you just can't get elsewhere. Their forecasts on elections and public events consistently beat polls and pundits. I rely on this data to make better decisions, not just for trading but for understanding the world around me. This isn't just useful for me; it's valuable for the public, media, and even policymakers who need accurate insights. Beyond forecasting, I use these markets to hedge personal financial risks tied to economic or political outcomes. For example, I've traded contracts related to interest rate decisions that could impact my investments. This isn't gambling. It takes research and judgment, much like trading stocks or commodities, and it serves a real economic purpose.
I also value the freedom to participate in legal, regulated markets like Kalshi. Platforms under CFTC oversight are far safer than unregulated offshore alternatives. If the U.S. over-restricts or bans these markets, activity will just move to less safe venues outside your jurisdiction. That doesn't protect anyone; it just cedes control. The U.S. should be leading in financial innovation, not handing the advantage to other countries. Regulated markets also ensure informed trading can improve price discovery, benefiting everyone in the system, not just traders like me.
I want to address a few specific questions from the ANPR. On Question 7, regarding public interest, I believe prediction markets serve the public by providing better information for decision-making. On Question 15, about defining gaming, I urge the CFTC to recognize that event contracts aren't gambling; they have legitimate purposes like hedging and price discovery. And on Question 29, about inside information, I think informed trading often makes prices more accurate, though I acknowledge the need for strict enforcement of existing insider trading laws.
I'm not blind to the risks like manipulation or insider trading, but the CFTC already has tools to tackle those issues. Broad bans or categorical restrictions would punish honest participants like me instead of targeting bad actors. I ask that you focus on proportionate, targeted regulation that lets prediction markets thrive while addressing specific concerns.
Thank you for considering my input. I hope you'll support a regulatory framework that encourages safe, innovative prediction markets in the U.S.
Sincerely,
Evan Ferretti
