Comment Text:
Dear Chairman and Commissioners,
My name is Jake Engelson, and I'm a trader and investor based in Idaho. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing to express my strong support for well-regulated prediction markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to people like me, as well as to society at large, and I urge you to craft rules that allow them to thrive under fair oversight.
As a trader, I rely on prediction markets for information that I simply can't get anywhere else. I've seen firsthand how their forecasts on elections and public events are often more accurate than polls or pundits. That kind of insight helps me make better decisions, not just in trading but in understanding the world around me. I know I'm not alone in this; the data these markets produce benefits everyone, from regular folks to policymakers who need reliable signals. Beyond that, these markets let me hedge real financial risks. For instance, Ive used event contracts to protect against uncertainties like policy changes or economic shifts that could impact my investments or personal finances. This isn't gambling, it's a practical tool, much like trading stocks or commodities, grounded in research and judgment.
I'm also a firm believer that regulated markets like Kalshi are the way to go. They're transparent, accountable, and far safer than the unregulated offshore platforms that pop up when access is restricted. If we push these markets underground by over-regulating or banning them, we lose consumer protections and drive activity to places with no oversight. Plus, the U.S. should be leading in financial innovation, not ceding ground to other countries. I've read some of the academic research on prediction markets, like studies by economists showing how they aggregate information efficiently, and I think we should lean into that potential for better decision-making and price discovery.
Addressing some of your specific questions, like those in Topic Area B (Questions 7-14) about public interest and balancing innovation with protection, I think the CFTC can strike the right balance by focusing on targeted rules rather than broad restrictions. And on Topic Area C (Questions 15-22), regarding whether these contracts are gaming, Id argue they serve legitimate economic purposes like hedging and forecasting, not entertainment. As for concerns about manipulation or insider trading in Topic Area E (Questions 29-32), I believe your existing tools to combat fraud in other derivatives markets can be adapted here without shutting down access for honest participants like me.
I ask you to support proportionate regulation that preserves our freedom to participate in legal, regulated prediction markets. Don't let fear of a few bad actors punish the majority who use these tools responsibly. Thank you for considering my perspective.
Sincerely,
Jake Engelson
