Comment Text:
Dear Chairman and Commissioners,
My name is Dylan Masters, and I'm a trader and investor based in Florida. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing to support proportionate regulation of these markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these platforms provide unique value to individuals like me, businesses, and even the broader public, and I want to share why I think the CFTC should regulate them thoughtfully rather than restrict or ban them outright.
As a trader, I rely on prediction markets for information that I simply can't get anywhere else. The prices on platforms like Kalshi often predict election outcomes or economic events more accurately than polls or pundits. I've seen this firsthand with election forecasts that cut through media noise and give a clearer picture of what's likely to happen. This isn't just useful for me as a trader; it's valuable for anyone trying to make informed decisions, whether that's a business owner planning for policy changes or a regular person trying to understand public events. I also use these markets to hedge personal financial risks. For example, Ive traded contracts tied to interest rate decisions to offset uncertainty around my mortgage timing. This kind of hedging is a real economic tool, not gambling.
I'm also aware of the concerns about manipulation or insider trading, and I get why those are issues. But banning or over-restricting prediction markets isn't the answer. For one, pushing these markets offshore to unregulated platforms would make things worse. I've looked at some of those offshore sites, and they lack the transparency and oversight that a regulated platform like Kalshi has under CFTC rules. Plus, the laws against insider trading and market manipulation already exist. The CFTC has the tools to enforce them. Shutting down entire markets to stop a few bad actors punishes everyone else who uses them responsibly.
Id like to touch on a few of your specific questions from the ANPR. On Question 7, regarding public interest, I strongly believe prediction markets serve the public by improving price discovery and forecasting accuracy. On Question 29, about inside information, I think informed trading often makes prices more accurate, benefiting all participants, as long as its not illegal insider trading. And on Question 15, about defining legitimate markets, Id argue these contracts are distinct from gaming because they require research and real-world judgment, much like trading stocks or commodities.
Prediction markets have solid academic backing too. Research shows they aggregate information efficiently, often outperforming traditional forecasting methods. We should be encouraging this kind of innovation in the US, not stifling it. I urge the CFTC to craft regulations that address specific risks without broad prohibitions. Lets keep these markets accessible, transparent, and safe for participants like me who rely on them for better information and risk management.
Thank you for considering my input.
Sincerely,
Dylan Masters
