Comment Text:
Dear Chairman and Commissioners,
My name is Isaiah Gonsalves, and I'm a trader and investor from Massachusetts. Im writing to comment on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I actively trade on regulated prediction markets like Kalshi, and I strongly support the CFTC crafting proportionate regulations that allow these markets to thrive while addressing real risks.
Ive found prediction markets to be an invaluable tool, both for my own decision-making and for accessing information thats just not available elsewhere. The prices on platforms like Kalshi often predict election outcomes or economic events more accurately than polls or pundits. Thats not just useful for traders like me; its a public good that helps everyone, from small business owners to policymakers, make better-informed choices. I also use these markets to hedge real risks, like potential policy changes that could impact my investments. This isnt gambling, its a practical way to manage uncertainty.
Im concerned that over-restricting or banning prediction markets would 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 and transparency. The U.S. should be leading the way in financial innovation, not ceding ground to other countries. If we stifle these markets here, we lose both economic opportunity and the chance to set global standards.
Addressing some of your specific questions, like those in Topic Area B on public interest (Questions 7-14), I believe prediction markets clearly serve the public by improving price discovery and forecasting accuracy. Academic research backs this up, showing how these markets aggregate information efficiently. On Topic Area E, regarding inside information (Questions 29-32), I think informed trading actually helps price discovery and benefits all participants, as long as its not based on illegal insider knowledge. The CFTC already has robust tools to combat manipulation and insider trading in other derivatives markets, and those can be applied here without resorting to broad bans.
I understand concerns about potential abuse, but the answer isnt to shut down entire markets. Targeted rules addressing specific risks make more sense than categorical prohibitions. Banning prediction markets to stop a few bad actors would punish honest traders like me and drive activity to shadier venues.
I urge the CFTC to support well-regulated prediction markets with rules that balance innovation and consumer protection. Lets keep these markets legal, transparent, and accessible to everyday traders, while using the strong enforcement tools you already have to tackle any misconduct. Thank you for considering my perspective.
Sincerely,
Isaiah Gonsalves
