Comment Text:
Dear Chairman and Commissioners,
My name is John Haberland, and I'm a trader and investor based in Virginia. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing to express my strong support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide real value to people like me, and to society as a whole, and I urge the CFTC to craft rules that protect consumers without stifling this innovative space.
As someone who trades regularly, I can tell you that event contracts are not gambling. They serve legitimate economic purposes, like hedging risks that affect my personal finances. For instance, I've used prediction markets to hedge against election outcomes that could impact my taxes or investment strategies. This isn't a game; it's a tool, just like trading stocks or futures based on research and judgment. Classifying these contracts as "gaming" would be a mistake, and I hope the CFTC recognizes their value in response to questions 15-22 on listed activities.
I also see prediction markets as a source of better information. Their forecasts are often more accurate than polls or pundits, which helps not just traders but anyone making decisions based on public events. This ties directly to questions 7-14 on public interest, where I believe the price discovery and risk management benefits outweigh the risks if properly regulated. Plus, allowing regular folks like me to participate democratizes access to this information. If only big institutions can trade, the insights stay with them, not the public.
I'm concerned about the alternative if these markets are over-restricted or banned. I've seen unregulated offshore platforms out there, and they're far riskier than a CFTC-registered market like Kalshi. Pushing activity offshore doesn't solve problems; it makes them worse. On questions 23-28 about procedural aspects, I'd argue for regulation over prohibition to keep activity safe and transparent here in the US. The US should lead in financial innovation, not cede this space to other countries.
I know there are concerns about manipulation or insider trading, and I get that. But the CFTC already has robust tools to tackle those issues, as noted in questions 29-32 on inside information. Informed trading often improves price discovery, benefiting everyone. Banning or over-restricting these markets to stop a few bad actors punishes the majority who use them responsibly. Proportionate, targeted rules make more sense than broad bans.
In closing, I ask the CFTC to support prediction markets with fair, balanced regulation. Don't let fear of misuse kill a tool that helps individuals and businesses hedge risks and access better information. I'm happy to provide more input if needed, and I appreciate the chance to comment.
Sincerely,
John Haberland
