Comment Text:
Dear Chairman and Commissioners,
My name is Edgar Roman, and I'm an Economics major at the University of Wisconsin-Madison (go Badgers!). I'm writing to express my strong support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). As a student with an interest in human interaction, (wisdom of the crowd, or game theory), I've found prediction markets to be an incredible tool for learning and research, and I believe they offer real value to society if properly regulated by the CFTC.
I actively trade on Prediction Markets. Kalshi, a regulated market, and it's given me hands-on experience with how collective knowledge shapes prices. I've seen firsthand how prediction markets often forecast election outcomes and public events more accurately than polls or pundits. For example, during the last election cycle, I tracked market predictions on Kalshi that consistently outperformed media projections. This isn't just fun for me as a student; it's valuable data that can inform public decision-making and improve price discovery for everyone, not just traders. I also think these markets give ordinary people like me a chance to participate in a financial system thats usually dominated by big players, and that democratized access makes the information even better.
I'm aware of concerns about manipulation or insider trading, and I get why those are issues to watch. But the CFTC already has strong tools to tackle these problems in other derivatives markets, and I believe those can be adapted here without resorting to broad bans or over-restrictions. Banning or heavily limiting prediction markets won't stop trading; itll just push activity to unregulated offshore platforms where there's no oversight at all. As someone who values safe, legal markets, I think regulated spaces like Kalshi are far better than the alternative. Plus, informed trading often improves price accuracy, benefiting all participants, as long as it's within legal bounds.
Id like to address a couple of specific questions from the ANPR. On Question 7, regarding balancing innovation and consumer protection, I believe the US should lead in financial innovation rather than cede ground to other countries. Prediction markets are a cutting-edge tool, and proportionate regulation can foster growth while addressing risks. On Question 29, about inside information, I think informed traders often enhance price discovery, and existing laws already prohibit misuse of nonpublic data. Let's focus on enforcing those rules rather than restricting entire markets.
Prediction markets provide a wealth of data for studying how information aggregates, and I hope the CFTC considers how regulation can support such research. So please support proportionate, targeted regulation of prediction markets. Don't ban or over-restrict them. Keep the US at the forefront of financial innovation while ensuring safety through existing tools and focused rules.
Thank you for considering my input.
Sincerely,
Edgar Roman
