Comment Text:
Dear Chairman and Commissioners,
My name is Liam Smith, and Im a trader and investor based in New York. Ive been actively trading on prediction markets like Kalshi for a while now, and Im 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 hope the CFTC will craft rules that support their growth while addressing valid concerns.
As a trader, Ive seen firsthand how prediction markets offer information you cant get anywhere else. Their forecasts on elections and public events consistently beat polls and pundits. Ive used these insights to make better decisions, not just in trading but in understanding the world around me. This isnt gambling, its a skill. Researching events, weighing probabilities, and placing trades takes the same kind of judgment I use in other investments. Event contracts also let me hedge real risks, like political outcomes that could impact my taxes or economic policies that affect my portfolio. This is a legitimate economic tool, not a game.
Im also a big believer in regulation over prohibition. Platforms like Kalshi, operating under CFTC oversight, are far safer than unregulated offshore alternatives. If the CFTC over-restricts or bans these markets, people like me will just turn to less secure venues with no consumer protections. Thats a worse outcome for everyone. I think the CFTC already has strong tools to handle risks like manipulation or insider trading. Ive read about your existing authority to go after bad actors in other derivatives markets, and I believe those same powers can apply here. Theres no need to ban entire categories of contracts to stop a few bad apples.
Specifically addressing some of your questions, Id like to weigh in on Topic B (Public Interest, Questions 7-14). Prediction markets balance innovation with consumer protection when theyre regulated properly, as they are on registered platforms. They also provide unmatched price discovery for events that matter to the public. On Topic C (Listed Activities, Questions 15-22), I urge you not to classify event contracts as gaming. They serve real purposes, like hedging and forecasting, that have nothing to do with gambling.
I ask the CFTC to support proportionate regulation that allows prediction markets to thrive while using your existing authority to address risks. Dont shut down a valuable tool because of fears that can be managed with targeted rules. Thank you for considering my perspective as a trader who relies on these markets.
Sincerely,
Liam Smith
