Comment Text:
Dear Chairman and Commissioners,
My name is Andrew Chen, and I'm a software engineer based in California. I work in tech, where data and innovation drive everything we do, and I've used prediction markets a few times to get a sense of how events like elections might play out. I'm writing to comment on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) because I believe these markets offer real value to society, and I want to see them regulated in a way that keeps them safe and accessible.
I've always been fascinated by how prediction markets aggregate information. In my field, we rely on data to make decisions, and I've seen firsthand that the forecasts from platforms like Kalshi are often more accurate than polls or pundit opinions. For elections and other public events, this kind of clarity isn't just useful for traders like me; it helps everyone, from journalists to policymakers, make sense of an uncertain world. Academic research backs this up too, showing how these markets improve price discovery and decision-making. I think the US has a chance to lead in this kind of financial innovation, and we shouldn't let other countries take the wheel by over-restricting or banning these tools.
That said, I get the concerns about consumer protection, which is why I strongly support regulation over outright bans. Banning or overly restricting prediction markets won't stop people from participating; it'll just push activity to unregulated offshore platforms where there's no oversight at all. A regulated market like Kalshi, under the CFTC's watch, is far safer. Plus, the CFTC already has solid tools to tackle manipulation and insider trading in other derivatives markets. I believe those can be adapted here without resorting to broad categorical prohibitions. Targeted, proportionate rules make more sense and address specific risks without killing innovation.
I'd like to touch on a couple of your specific questions from the ANPR. On Question 7, about balancing innovation and consumer protection, I think the answer lies in strong oversight that keeps markets fair while letting new ideas grow. And on Question 11, regarding the public interest benefits of price discovery, I see prediction markets as a unique source of information that benefits society as a whole, not just participants.
I'm asking you to support proportionate regulation of prediction markets. Don't ban or over-restrict them. Keep the US at the forefront of financial innovation, protect consumers with smart rules, and ensure these markets can continue providing valuable insights for everyone. Thank you for considering my perspective.
Sincerely,
Andrew Chen
