Comment Text:
Dear Chairman and Commissioners,
My name is Preston Estes, and I'm just an everyday citizen from North Carolina writing to share my thoughts on 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 regulating them in a fair and balanced way, not banning or overly restricting them.
I believe prediction markets are incredibly valuable for society. They've consistently proven to be more accurate than polls or pundits when it comes to forecasting elections and other public events. That kind of information isn't just helpful to traders like me; it's useful to everyone, from journalists to policymakers, who need reliable data to make decisions. I also appreciate that these markets give regular people a chance to participate. If only big institutions can trade, all that valuable insight stays locked up with them. Opening these markets to everyday folks makes the forecasts better and feels a lot fairer.
I'm not a financial expert, but I can see that prediction markets aren't gambling. They take research and judgment, just like investing in stocks. I've used them to think through risks that affect me personally, like how an election might impact my taxes or local business regulations. Classifying event contracts as "gaming" feels wrong when they serve real economic purposes like hedging and price discovery. There's solid academic research backing this up too, showing how these markets aggregate information efficiently. That transparency benefits us all.
I also want to address some of the concerns raised in your questions, specifically around manipulation and insider trading, like in Questions 29 to 32. I get why those are worries, but the CFTC already has strong tools to tackle these issues in other markets. Those same tools can work here. Banning or over-restricting prediction markets to stop a few bad actors punishes the rest of us who use them responsibly. And honestly, if you push too hard with restrictions, people will just turn to unregulated offshore platforms, which are way less safe than something like Kalshi on a CFTC-registered exchange. That's a worse outcome for everyone.
On the public interest side, like in Questions 7 to 14, I think the balance should lean toward innovation. The U.S. has a chance to lead in financial technology, not hand that advantage to other countries. Proportionate regulation that targets specific risks makes more sense than broad categorical bans. Let's keep these markets accessible and safe without stifling their potential.
I urge you to support well-regulated prediction markets that allow regular people like me to participate. Don't let overregulation or outright bans push this valuable tool into the shadows. Thank you for considering my input.
Sincerely,
Preston Estes
