Comment Text:
Dear Chairman and Commissioners,
My name is Joseph Brown, and I'm a trader and investor based in Arizona. 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 unique value to people like me and to society as a whole, and I urge the CFTC to craft rules that allow them to thrive under sensible oversight.
As a trader, I've seen firsthand how prediction markets offer information you just can't get elsewhere. The prices on these platforms often predict outcomes more accurately than polls or pundits. I remember last year, during a major election cycle, the odds on Kalshi were far closer to the final result than any news outlet's forecast. That kind of insight isn't just useful for traders; it's valuable for anyone trying to understand what's really happening. Plus, these markets let regular folks like me participate, not just big institutions. That democratizes access to information and makes the forecasts even sharper.
I also use prediction markets to hedge personal financial risks. For instance, Ive traded contracts tied to economic indicators like inflation data because it directly impacts my investments and cost of living out here in Arizona. This isn't gambling. It takes research and judgment, just like trading stocks or commodities. Classifying event contracts as "gaming" feels wrong to me; they serve real economic purposes like price discovery and risk management. Im glad to see the CFTC asking about this distinction in Questions 15-22 under Listed Activities, and I strongly believe these contracts should be treated as legitimate financial instruments, not games of chance.
Another point I care deeply about is regulation versus prohibition. Trading on a regulated platform like Kalshi, under CFTC oversight, feels much safer than the alternative of unregulated offshore sites. If the rules become too restrictive, people will just move to those less secure platforms. Thats a worse outcome for everyone. I hope the CFTC, in considering Questions 7-14 on Public Interest, recognizes that regulated markets strike the right balance between innovation and consumer protection.
Lastly, I want to highlight the academic research behind prediction markets. Studies have shown they aggregate information efficiently, often outperforming traditional forecasting methods. This transparency of data benefits not just traders but policymakers and the public too. Banning or over-restricting these markets would throw away a powerful tool.
I understand concerns about manipulation or insider trading, but the CFTC already has strong laws and tools to address those issues. Punishing everyone by limiting these markets isn't the answer. I respectfully ask that you support proportionate regulation that lets prediction markets continue to operate and grow while addressing specific risks with targeted rules.
Thank you for considering my input.
Sincerely,
Joseph Brown
