Comment Text:
Dear Chairman and Commissioners,
My name is Adam Schadt, and I'm a trader and investor based in Maryland. As someone who works in business valuation and manages my own personal investments, I've been actively trading on prediction markets like Kalshi and, earlier, PredictIt since September 2019. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my strong support for well-regulated prediction markets in the United States.
I believe prediction markets offer unique value that can't be found elsewhere. They've consistently produced more accurate forecasts than polls or pundits on everything from elections to public events. As a trader, I rely on this information for better decision-making, and I know it benefits the broader public, media, and even policymakers. Beyond that, these markets allow me to hedge real financial risks. For instance, I've used event contracts to offset uncertainties around policy changes that could impact my investments or business valuations I work on. This isn't gambling; it's a legitimate economic tool, much like trading stocks or commodities, requiring research and judgment. Classifying these contracts as "gaming," as discussed in Questions 15-22, ignores their clear purpose in price discovery and risk management.
I'm also a firm believer that regulated markets, like Kalshi operating under CFTC oversight, are far safer than the alternative. If the U.S. bans or over-restricts these markets, trading will just move to unregulated offshore platforms, increasing risks for everyone involved. I've seen firsthand how domestic platforms provide transparency and accountability that offshore venues lack. Addressing Questions 7-14 on public interest, I think the CFTC should prioritize consumer protection by keeping these markets regulated here at home, not pushing activity out of reach of U.S. oversight.
On concerns like manipulation or insider trading, raised in Questions 29-32, I want to point out that the CFTC already has robust tools to tackle these issues. They're illegal in any market, and informed trading often improves price discovery, benefiting all participants. Banning entire categories of contracts to stop a few bad actors, as considered in Questions 23-28, feels like overkill. Proportionate, targeted rules make more sense than broad restrictions. Let's not forget the U.S. should be leading in financial innovation, not ceding ground to other countries. Event contracts are still young, and they offer diversification for investors like me and valuable data for academics. Their accuracy will only improve as more people participate.
Please don't let a few negative headlines derail this budding industry. I urge the CFTC to support proportionate regulation of prediction markets, nurturing their growth while using existing safeguards to address specific risks. Keep these markets accessible, safe, and regulated here in the U.S.
Sincerely,
Adam Schadt
