Comment Text:
Dear Chairman and Commissioners,
My name is Kari Kallio, and Im a trader and investor from New Jersey. As a market maker, I actively trade on prediction markets like Kalshi and Polymarket, and Im writing to express my strong support for well-regulated prediction markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). Ive seen firsthand how these markets provide unique value, and I believe the CFTC should regulate them proportionately rather than impose broad restrictions or bans.
Prediction markets arent just a niche interest for me; theyre a tool that consistently outperforms polls and pundits in forecasting elections and other public events. Ive relied on platforms like Kalshi to get a clearer picture of outcomes that affect my financial planning, from election results to economic indicators. This isnt gambling. Its about research, judgment, and real-world analysis, much like trading stocks or commodities. Classifying event contracts as gaming ignores their legitimate economic purpose, like price discovery and hedging. For instance, Ive used these markets to hedge personal financial risks tied to policy changes or interest rate decisions. Thats not a game; its a practical way to manage uncertainty.
I also believe regulated markets are far safer than the alternative. Platforms like Kalshi, operating under CFTC oversight, provide transparency and consumer protection that offshore platforms cant match. Banning or over-restricting prediction markets wont stop trading; it will just push activity to unregulated, riskier venues. The U.S. should lead in financial innovation, not cede ground to other countries. Plus, peer-to-peer trading, which adds to market depth, becomes nearly impossible if regulation is fragmented across states or overly restrictive.
Addressing some of your specific questions, like those in Topic B (Questions 7-14) on public interest and Topic E (Questions 29-32) on inside information, Id argue that informed trading actually improves price discovery and benefits everyone, not just traders. The CFTC already has strong tools to tackle manipulation and insider trading in other derivatives markets; those can be adapted here without reinventing the wheel. A proportionate approach, targeting specific risks rather than broad categories, makes more sense, as raised in Topic D (Questions 23-28). Overregulation punishes honest participants and stifles better information for public decision-making.
Im not blind to concerns about manipulation or consumer harm, but shutting down these markets isnt the answer. Use the authority you have to police bad actors and keep the space open for innovation. I urge you to support regulated prediction markets with targeted, balanced rules that protect consumers while preserving access for everyday traders like me.
Thank you for considering my input.
Sincerely,
Kari Kallio
