Comment Text:
Dear Chairman and Commissioners,
My name is Jonathan Jones, a Certified Public Accountant and Financial Operations Principal with over 20 years of experience in the finance industry, based in Florida. Ive spent my career analyzing markets, managing risk, and ensuring compliance, and Im writing to express my strong support for proportionate regulation of prediction markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets offer unique value to society and to investors like me, provided they are regulated sensibly.
Ive actively invested for years and recently tried trading on Kalshi, a CFTC-registered platform, to understand this emerging market. My experience, though limited, convinced me that prediction markets are just thatmarkets, not gambling. They require research, judgment, and an understanding of real-world events, much like trading stocks or commodities. Classifying event contracts as gaming (as discussed in Questions 15-22) ignores their legitimate economic purpose, such as price discovery and risk management. The data these markets generate is often more reliable than polls or pundits, offering better information for public decision-making, which benefits everyone, not just traders.
I also see prediction markets as a space where the US should lead in financial innovation. If we over-restrict or ban these markets, we risk ceding ground to other countries while pushing activity to unregulated offshore platforms, which are far less safe for consumers. Regulated markets like Kalshi, under CFTC oversight, provide transparency and accountability that offshore alternatives lack. Id urge the Commission to prioritize consumer protection through regulation rather than prohibition, as touched on in Questions 7-14 regarding public interest.
That said, Im not blind to the risks. Markets can be manipulated, and insider information is a real concern, as noted in Questions 29-32. However, I believe informed trading often improves price discovery, benefiting all participants. The answer isnt to shut down prediction markets but to enforce existing laws against insider trading and fraud. My experience with the CFTC suggests that current staffing and regulatory frameworks may not fully address these new markets, so I support targeted rules and resources to prevent abuse, rather than broad categorical bans (as discussed in Questions 23-28).
Prediction markets give regular investors like me the freedom to participate in legal, regulated spaces while contributing to valuable public data. I ask the Commission to regulate these markets proportionately, focusing on specific risks without stifling innovation or driving activity offshore. Lets keep the US at the forefront of financial markets while protecting consumers through smart oversight.
Sincerely,
Jonathan Jones
