Comment Text:
Dear Chairman and Commissioners,
My name is Chris Paniccia, and I'm a trader and investor based in New York. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I strongly support the development of well-regulated prediction markets and urge the CFTC to adopt a balanced, proportionate approach rather than imposing broad bans or overly restrictive rules.
As a trader, Ive seen firsthand how prediction markets provide information you cant get anywhere else. Their forecasts on elections and public events consistently beat polls and pundits. This isnt just useful for people like me who trade; it helps everyone by creating better data for decision-making. Ive also used these markets to hedge personal financial risks tied to economic events, like inflation data releases that impact my investments. This isnt gambling. Its a legitimate tool that requires research and judgment, much like trading stocks or commodities.
Im concerned about the idea of classifying event contracts as gaming, which I believe is addressed in questions 15-22 of the ANPR. These contracts serve real economic purposes, whether its price discovery or hedging risks. Calling them gaming would be a misstep and could push activity to unregulated offshore platforms, which are far less safe for consumers. Id much rather trade on a CFTC-regulated market like Kalshi, where theres oversight, than see activity forced to sketchy alternatives. On questions 7-14 regarding public interest, I believe regulated markets strike the right balance between innovation and protection. The US should be a leader in financial innovation, not cede ground to other countries by over-restricting these markets.
I also want to address concerns about manipulation and insider trading, as raised in questions 29-32. I get why this is a worry, but the CFTC already has strong tools to tackle these issues in other derivatives markets. Use those tools here instead of banning or over-limiting prediction markets. Informed trading actually improves price discovery, benefiting all participants, not just a few. And banning these markets to stop a handful of bad actors punishes honest traders like me. Plus, academic research backs the value of these markets in aggregating information efficiently. Theyre a net positive for society.
Im asking the CFTC to regulate prediction markets in a targeted way that addresses specific risks without stifling their potential. Dont let broad categorical bans or over-regulation drive this industry offshore. Keep the US competitive and protect consumers by supporting safe, regulated platforms. I appreciate the chance to share my perspective and hope youll consider my input as you move forward.
Sincerely,
Chris Paniccia
