Comment Text:
Dear Chairman and Commissioners,
My name is Ryan Pun, and I'm a trader and investor based in California. I've been actively trading on prediction markets like Kalshi and Polymarket for a while now, and Im writing to express my strong support for well-regulated 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 regulate them proportionately rather than imposing bans or overly restrictive rules.
As a trader, Ive seen firsthand how prediction markets produce forecasts that are often more accurate than polls or pundits, especially for elections and major public events. Ive relied on these platforms to get a clearer picture of whats likely to happen, whether its a presidential race or a key policy decision. This isnt just useful for me; its valuable for anyone who needs reliable information, from journalists to policymakers. The aggregated wisdom of many traders often beats the guesswork of a few experts, and thats a public good worth protecting.
I also want to stress that regulated markets like Kalshi, which operate under CFTC oversight, are far safer than unregulated offshore platforms. If the CFTC over-restricts or bans these markets, traders like me will be pushed to less secure venues with no consumer protections. Thats a worse outcome for everyone. Regulation should keep activity onshore, under your supervision, where you can enforce rules and protect participants.
Another concern I have is the idea of classifying event contracts as gaming. I dont see this as gambling at all. Trading on prediction markets requires research and judgment about real-world events, much like trading stocks or commodities. These contracts serve legitimate economic purposes, like hedging risks or gaining insight through price discovery. Labeling them as gaming ignores their real value.
On the topic of informed trading, which I believe relates to Questions 29-31 in the ANPR, I think traders with better information actually improve price discovery. Their participation makes the markets predictions more accurate, which benefits everyone, not just those trading. Of course, insider trading by federal officials or others with nonpublic information is a concern, but thats already illegal. The CFTC should focus on enforcing existing laws rather than restricting entire markets to address a problem that can be targeted more directly.
Im not blind to the risks of manipulation or bad actors, but shutting down or over-regulating prediction markets punishes honest participants like me. You already have tools to combat fraud and manipulation, as noted in Questions 1-6. Use those instead of broad bans.
In closing, I ask the CFTC to support proportionate regulation of prediction markets. Keep them accessible, safe, and under U.S. jurisdiction so they can continue providing accurate forecasts and economic value. Thank you for considering my perspective.
Sincerely,
Ryan Pun
