Comment Text:
Dear Chairman and Commissioners,
My name is Angel Reyes, and I'm a trader and investor from California. I'm writing to express my strong support for the proportionate regulation of prediction markets as outlined in the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I'm relatively new to these markets, but I've quickly seen their value and potential, both for individuals like me and for society at large.
As someone who spends a lot of time analyzing markets, I value the unique information that prediction markets provide. I've noticed they often forecast events, like elections or policy changes, with more accuracy than polls or pundits. That kind of insight isn't just helpful for traders; it can inform public decision-making and improve price discovery for everyone. I also believe these markets allow everyday people to hedge real financial risks. For instance, I've considered using them to offset uncertainties tied to policy shifts that could impact my investments or personal finances. This isn't gambling, in my view. Its a legitimate economic tool, much like trading stocks or commodities, and classifying event contracts as "gaming" overlooks their real purpose.
Im also concerned about the alternative if these markets face over-restriction or outright bans. Regulated platforms like Kalshi, operating under CFTC oversight, are far safer than unregulated offshore options. If we push this activity underground, we lose consumer protections and transparency. The U.S. should be leading in financial innovation, not ceding ground to other countries. We have a chance to set the standard here. On that note, I appreciate the CFTC's existing tools to tackle issues like manipulation and insider trading. Those safeguards are already in place for other derivatives, and they can work for prediction markets too. Banning or overly restricting these markets punishes honest participants like me while failing to address bad actors effectively. Targeted, proportionate rules make more sense than broad categorical prohibitions.
Id like to directly address a few of the questions in the ANPR. Regarding Questions 7-14 on public interest, I believe prediction markets balance innovation with consumer protection when regulated properly, and their price discovery benefits outweigh the risks. On Questions 15-22 about listed activities, I urge the CFTC to recognize event contracts as distinct from gaming due to their economic utility. And for Questions 29-32 on inside information, I think informed trading actually improves price discovery, benefiting all participants, as long as existing laws against insider trading are enforced.
I hope the CFTC will support a regulatory framework that allows prediction markets to thrive while addressing specific risks with focused rules. Please dont let over-restriction push this valuable tool offshore or out of reach for everyday Americans like me. Thank you for considering my input.
Sincerely,
Angel Reyes
