Comment Text:
Dear Chairman and Commissioners,
My name is Daryle Minor, and I'm a trader and investor based in Virginia. I've been actively trading on prediction markets like Kalshi and Polymarket for a while now, and Im writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I strongly support the development of well-regulated prediction markets in the United States, and I want to share why I believe proportionate regulation, not bans or over-restrictions, is the right path forward.
As someone who trades regularly, Ive seen firsthand how prediction markets provide unique value. Theyre not just a niche hobby; they offer insights you cant get from polls or pundits. Ive used these platforms to hedge personal financial risks, like betting on election outcomes that could impact my taxes or business decisions. This isnt gambling, its a legitimate tool for managing uncertainty, much like trading futures or options. Classifying event contracts as gaming feels like a misstep when they serve real economic purposes, from price discovery to risk management. I urge the CFTC to recognize this distinction when considering questions 15 through 22 on listed activities.
I also worry about what happens if these markets get banned or overly restricted. Ive traded on unregulated offshore platforms before, and I can tell you theyre nowhere near as safe or transparent as a CFTC-registered market like Kalshi. Pushing activity offshore by over-regulating here doesnt protect consumers, it puts us at greater risk. On questions 7 through 14 regarding public interest, I believe the balance between innovation and consumer protection lies in keeping these markets regulated domestically. The US should be a leader in financial innovation, not cede that ground to other countries.
Another point I want to hit is that informed trading isnt a problem, its a benefit. When people with knowledge trade, it makes the market prices more accurate, which helps everyone. The CFTC already has strong tools to tackle manipulation and insider trading in other derivatives markets. Use those for prediction markets too, rather than broad bans. Im particularly interested in your questions 29 through 32 on inside information, and Id argue that targeted enforcement of existing laws is better than categorical restrictions.
Finally, I want to stress that regulation should be proportionate. Broad bans or overly tight rules punish the many for the potential bad actions of a few. Focus on specific risks with targeted solutions. Ive read academic research showing how prediction markets aggregate information efficiently, and I believe transparent data from these platforms can benefit society as a whole, not just traders like me.
I respectfully ask the CFTC to support the growth of regulated prediction markets with fair, balanced rules that protect consumers without stifling innovation. Thank you for considering my input.
Sincerely,
Daryle Minor
