Comment Text:
Dear Chairman and Commissioners,
My name is Miguel Vargas, and I'm a student based in California with a strong interest in economics and public policy. Im writing to comment on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. As someone who actively trades on regulated platforms like Kalshi, I want to express my support for well-regulated prediction markets and urge the CFTC to adopt a balanced approach that fosters innovation while protecting consumers.
I first got into prediction markets as a way to better understand real-world events, especially elections and economic indicators. As a student, Ive seen how the forecasts on these platforms often beat out polls and pundits in accuracy. Thats not just interesting to me academically; its valuable to society. These markets aggregate information in a way that helps everyone, from regular people like me to policymakers, make sense of complex issues. I also appreciate the chance to participate in a legal, regulated space. Platforms like Kalshi give me confidence that there are safeguards in place, unlike unregulated offshore sites where theres no oversight. Banning or over-restricting these markets would likely push activity to those riskier venues, which helps no one.
I also want to stress that event contracts arent gambling in my view. Trading on Kalshi requires research, analysis, and judgment about real-world outcomes, much like investing in stocks or other derivatives. These contracts serve legitimate purposes, like price discovery and even hedging for some users. Calling them "gaming" feels like a misstep when they provide real economic value. On top of that, I believe informed trading actually improves the quality of information in these markets. It benefits all participants by making prices more accurate, as long as its done within legal bounds.
Addressing some of the specific questions in the ANPR, Id like to touch on Question 7 under Public Interest. I believe the CFTC can balance innovation with consumer protection by maintaining robust oversight without broad bans. The CFTC already has tools to tackle manipulation and insider trading in other markets, and those can be applied here too, as noted in Questions 29-32 on inside information. And in response to Question 15 on listed activities, I urge the Commission to avoid classifying event contracts as gaming and instead focus on their economic utility.
The US has a chance to lead in financial innovation with prediction markets. If we over-regulate or restrict them, other countries will step in, and well lose that edge. Im all for consumer protection, but it should come through smart regulation, not heavy-handed limits that drive people to less safe options offshore.
Thank you for considering my perspective. I strongly encourage the CFTC to support proportionate regulation of prediction markets and avoid bans or overly restrictive rules that would harm innovation and access for regular people like me.
Sincerely,
Miguel Vargas
