Comment Text:
Dear Chairman and Commissioners,
My name is Jaxon Smith, and I'm a trader and investor from Texas. I've been actively trading on prediction markets like Kalshi and Polymarket for a while now, and I'm 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 and want to share why I think theyre valuable, both for me personally and for society at large.
As a trader, I've seen firsthand how prediction markets offer insights you can't get from polls or pundits. I've used these platforms to gauge election outcomes and other public events, and time after time, the market prices have been more accurate than so-called expert predictions. This isn't just helpful for traders like me; it benefits everyone by providing clearer, crowd-sourced information about what's likely to happen. I think that's a public good worth protecting.
I also want to push back on the idea that event contracts are just gambling. That's not how I see it at all. Trading on these markets takes research and judgment, much like trading stocks or commodities. I'm not rolling dice; I'm analyzing data and making informed bets on real-world outcomes. These contracts serve a real economic purpose, whether it's hedging risks tied to policy changes or gaining insight into future events. Classifying them as "gaming" feels like a misstep to me, and I urge the CFTC to recognize their legitimate value.
I'm all for regulation, but it needs to be proportionate. Broad bans or overly restrictive rules would hurt regular traders like me while doing little to address actual risks. Targeted rules to tackle issues like manipulation or insider trading make more sense. Speaking of insider trading, I believe informed trading often improves price discovery. When knowledgeable participants trade, the market prices get sharper, and that helps everyone. The CFTC already has tools to handle bad actors, so lets not punish the whole market for the actions of a few.
On a related note, I'm worried about U.S. competitiveness. If we over-regulate prediction markets, we risk pushing innovation and activity to other countries. I want the U.S. to lead in financial markets, not fall behind. I think the CFTCs questions on balancing innovation with consumer protection (like in Questions 7-9 under Public Interest) and on defining gaming versus legitimate markets (Questions 15-17 under Listed Activities) are critical here. My view is simple: lean toward innovation with smart, focused safeguards.
In closing, I ask the CFTC to support proportionate regulation of prediction markets. Dont ban or over-restrict them. These markets are a powerful tool for forecasting and economic activity, and regular folks like me deserve the freedom to participate in legal, regulated platforms. Thank you for considering my input.
Sincerely,
Jaxon Smith
