Comment Text:
Dear Chairman and Commissioners,
My name is Cole Romanoff, and I'm a trader and investor from Arizona. I'm also a student who spends a lot of time researching politics and sports, using that knowledge to trade on prediction markets like Kalshi and Polymarket. I'm writing to support the proportionate regulation of prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to people like me and to society as a whole, and I urge the CFTC to craft rules that allow them to thrive under fair oversight.
As a student and trader, I've seen firsthand how prediction markets offer insights you can't get from polls or pundits. For instance, during the last election cycle, I relied on market prices on Kalshi to cut through the noise of biased news and shaky surveys. Those prices often turned out more accurate than anything else. This isn't just useful for traders; it helps everyone, from voters to policymakers, make better decisions with clearer information. I also use these markets to hedge personal risks, like potential policy changes that could impact my family's small investments or future taxes. This isn't gambling. It takes research and judgment, just like trading stocks or commodities, and calling it "gaming" ignores the real economic purpose behind event contracts.
I'm glad the CFTC is considering regulation instead of outright bans, especially in light of Questions 7 and 8 about balancing innovation with consumer protection. Regulated platforms like Kalshi are far safer than offshore alternatives like Polymarket, where there's no oversight if something goes wrong. Banning or over-restricting these markets won't stop people from trading; it'll just push activity to unregulated spaces with no consumer protections. The US should lead in financial innovation, not cede ground to other countries. On Questions 15 and 16 about defining "gaming," I strongly believe event contracts serve legitimate purposes like price discovery and hedging, distinct from gambling. And regarding Questions 29 and 30 on inside information, I think informed trading actually improves price accuracy, benefiting all participants. The CFTC already has robust tools to tackle manipulation and insider trading in other markets; those can be adapted here without broad prohibitions.
I also want to highlight the academic research supporting prediction markets. Studies show they aggregate information efficiently, often outperforming traditional forecasting methods. This transparency and data can help everyone, not just traders. But if access is limited to big institutions, regular people like me lose out on both the information and the chance to participate in a legal, regulated space.
I urge the CFTC to support well-regulated prediction markets that allow everyday citizens to participate while addressing specific risks with targeted rules. Please don't let over-restriction or bans push this valuable tool offshore or out of reach. Thank you for considering my input.
Sincerely,
Cole Romanoff
