Comment Text:
Dear Chairman and Commissioners,
My name is Lisa Contreras, and I'm a trader and investor based in Texas. I've been actively trading on prediction markets like Kalshi and Polymarket for a while now, and I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I strongly support the development of well-regulated prediction markets, and I hope my perspective as an everyday participant can help shape your approach.
I rely on prediction markets to make informed decisions and manage risks that affect my financial life. For example, I've used these platforms to hedge against uncertainties like election outcomes or economic policy changes that could impact my investments or tax planning. This isn't just speculation for me; it's a practical tool. These markets provide unique information through their prices, often more reliable than polls or news commentary. I believe allowing regular people like me to participate makes the system fairer and the data more accurate. If only big institutions can trade, they keep all the insights to themselves.
I want to address a few specific concerns I've seen raised, especially around whether event contracts are "gaming." I don't see it that way at all. Trading on these platforms requires research, analysis, and real-world judgment, much like trading stocks or commodities. Classifying event contracts as gambling ignores their legitimate economic purpose, like hedging risks for individuals and businesses. I'm particularly drawn to Question 15 in your ANPR about defining gaming versus legitimate markets. My view is clear: these contracts serve a real purpose and shouldn't be lumped in with gambling.
Another big worry for me is what happens if these markets get banned or over-restricted. I've traded on both regulated platforms like Kalshi, which I trust because they're under CFTC oversight, and unregulated offshore ones like Polymarket. The difference in safety and transparency is night and day. If you clamp down too hard, people like me won't stop trading; we'll just get pushed to less secure, offshore platforms where there's no protection. That can't be the goal. I think Question 7 on balancing innovation and consumer protection gets at this. Regulation should keep us safe, not drive us away.
I also want to touch on insider trading or manipulation concerns, related to Questions 29-32. These are real issues, but the answer isn't to shut down the markets. Laws already exist to stop federal employees or anyone else from using nonpublic information, and the CFTC has tools to fight manipulation. Use those tools, don't punish the rest of us by limiting access.
In closing, I urge you to support proportionate regulation of prediction markets. Don't ban or over-restrict them. Keep platforms like Kalshi accessible for people like me who use them responsibly to hedge risks and gain valuable insights. I'm happy to provide more details on my experiences if it helps.
Sincerely,
Lisa Contreras
