Comment Text:
Dear Chairman and Commissioners,
My name is Allen Gu, and I'm a student from New Jersey with an academic interest in markets and public policy. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've used prediction markets a few times myself, and I strongly support their regulation in a balanced, proportionate way that allows them to thrive while addressing real risks. I believe these markets offer unique value to society, and Id like to share why I think the CFTC should encourage their growth under a sensible framework.
As someone studying how information shapes decisions, Ive seen firsthand how prediction markets provide insights that polls and pundits often miss. Their track record for forecasting elections and other public events is impressive, and that accuracy helps everyone, from regular citizens like me to policymakers. Its not just about trading; its about better data for better choices. I also think the U.S. should be a leader in financial innovation. If we over-restrict or ban these markets, we risk pushing activity to unregulated offshore platforms where theres no oversight. Regulated markets like Kalshi are far safer, and Id rather see the CFTC set the standard globally than cede that space to other countries.
I want to address a couple of specific concerns raised in your ANPR. Regarding Questions 7-14 on public interest, I believe informed trading actually improves price discovery and benefits all participants. These markets aggregate knowledge in a way nothing else does, and shutting them down would mean losing that resource. On Questions 15-22 about listed activities, I dont think event contracts should be classified as gaming. They serve real economic purposes like forecasting and risk management, much like other derivatives. Treating them as gambling misses the point of their value.
I also worry about the impact of overly harsh rules. If prediction markets are banned or squeezed too tightly, people will just turn to offshore sites with no protections. Plus, as an academic, I value the transparency and data these markets produce for research. Theyre a goldmine for understanding public sentiment, and Id hate to see that lost.
I understand there are risks like manipulation or insider trading, but the CFTC already has tools to tackle those issues in other markets. Use those same powers here instead of broad restrictions that punish everyone. I urge you to craft rules that protect consumers while letting prediction markets grow as a tool for forecasting and innovation.
Thank you for considering my input. I hope youll support a regulatory approach that keeps these markets accessible and safe.
Sincerely,
Allen Gu
