Comment Text:
Dear Chairman and Commissioners,
My name is Daron Henry, 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 in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I strongly support the development of well-regulated prediction markets and want to share why I believe they are valuable, both to me personally and to society as a whole.
As someone who trades regularly, I've seen firsthand how prediction markets provide information you just can't get anywhere else. Whether it's an election outcome or a major public event, the prices on these platforms often predict results more accurately than polls or pundits. I rely on that data to make informed decisions, not just for trading but for understanding the world around me. This isn't gambling, no matter how some might label it. Trading event contracts takes research and judgment, much like trading stocks or commodities. Classifying these contracts as "gaming" feels like a misstep to me, and I urge the CFTC to recognize their legitimate economic purpose, as asked in Questions 15-22 about listed activities.
I also value the ability to hedge real risks through these markets. For instance, I've used event contracts to offset uncertainties tied to policy changes that could impact my investments. This isn't just play money; it's a practical tool for managing exposure. Small businesses and individuals like me need access to these tools, and regulated platforms like Kalshi are far safer than unregulated offshore alternatives. If the CFTC over-restricts or bans these markets, activity will just move to less safe venues. I think that's a point worth considering under Questions 7-14 on public interest.
Another thing I care about is the freedom to participate in legal, regulated markets. Democratizing access to prediction markets lets regular people like me have a stake in forecasting and understanding public events. And honestly, when informed traders participate, it improves price discovery for everyone. I don't think the answer to concerns about insider trading or manipulation is to shut down these markets. Those issues are already illegal, and the CFTC has the tools to enforce against bad actors, as touched on in Questions 29-32 about inside information. Banning markets punishes the wrong people.
I'm asking the CFTC to support proportionate regulation of prediction markets. Don't over-restrict or ban broad categories of event contracts. Instead, focus on targeted rules to address specific risks while preserving the benefits these markets provide for forecasting, hedging, and civic engagement. Thank you for considering my input.
Sincerely,
Daron Henry
