Comment Text:
Dear Chairman and Commissioners,
My name is Noah Hughes, and I'm a student based in New York. I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. As someone who actively trades on platforms like Kalshi, I strongly support the development of well-regulated prediction markets in the United States, and I urge the CFTC to craft rules that allow for innovation and access while addressing real risks.
I've been using prediction markets for a while now, and I can say firsthand that they provide unique value. They're not just a hobby for me; theyre a way to engage with real-world events and test my understanding of complex issues. Beyond that, as a student with an academic interest in data and forecasting, I see these markets as a goldmine of information. The aggregated predictions often outperform polls or expert opinions, and that kind of transparency is something we need more of in public discourse. I worry that overly restrictive rules would limit access to this data and stifle academic research into how markets can improve forecasting.
I also believe prediction markets serve a practical purpose for hedging risks. For individuals like me, or even small businesses, being able to trade on outcomes like economic indicators or policy changes can help manage uncertainty. A friend who runs a small import business, for example, has talked about how tariff policy outcomes directly affect his costs. Markets like these could give him a way to offset some of that risk. Banning or over-restricting them doesn't eliminate the need; it just pushes people to unregulated offshore platforms where theres no oversight. Ive seen some of those sites, and theyre far sketchier than a CFTC-regulated platform like Kalshi. Regulation keeps us safer, not bans.
Regarding some of the specific questions in the ANPR, Id like to address Question 7 on balancing innovation with consumer protection. I think the CFTC can strike that balance by focusing on transparency and enforcing existing rules against manipulation, rather than broad prohibitions. And for Question 15, on defining legitimate markets, Id argue that these contracts arent gambling when theyre tied to real economic or civic outcomes. Theyre a tool for insight and risk management.
Im not blind to the concerns about insider trading or manipulation. Those are real issues. But the answer isnt shutting down markets; its using the tools the CFTC already has to punish bad actors. Dont penalize students, researchers, and everyday traders for the actions of a few.
I urge you to support proportionate regulation that keeps prediction markets accessible on regulated platforms. Lets keep this activity in the US, under your oversight, where it can benefit society without unnecessary risks.
Thank you for considering my perspective.
Sincerely,
Noah Hughes
