Comment Text:
Dear Chairman and Commissioners,
My name is Joseph Baker, 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 wanted to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I strongly support well-regulated prediction markets, and I hope my perspective as someone who uses these platforms can help inform your approach.
For me, prediction markets aren't just a hobby or a game. They're a tool that provides unique information I can't get anywhere else. Whether I'm looking at election outcomes that could impact my investments or economic indicators like CPI that affect my financial planning, the prices on these markets often cut through the noise of pundits and polls. I've found them to be more accurate than most forecasts out there, and that benefits not just traders like me but anyone who pays attention to these signals. Plus, trading on these platforms isn't gambling. It takes research, analysis, and real-world judgment, much like trading stocks or commodities. Labeling event contracts as "gaming" would be a misstep, as they serve genuine economic purposes like price discovery and hedging.
One thing I can't stress enough is the importance of regulated markets over unregulated alternatives. Platforms like Kalshi, which operate under CFTC oversight as a designated contract market, provide a safe and transparent environment. I've seen the difference firsthand. Before I started using Kalshi, I explored some offshore prediction platforms, and the lack of oversight was glaring. There were issues with transparency, delayed payouts, and no real recourse if something went wrong. If the CFTC over-restricts or bans these markets in the U.S., people like me won't just stop trading. We'll be pushed to those less safe, unregulated venues. I urge you to consider this in your discussions around public interest and consumer protection, particularly in response to Questions 7 and 8 from the ANPR about balancing innovation and safety.
I also want to touch on the concern about bad actors, like insider trading or manipulation, which I know comes up a lot. I get why that's a worry, and it should be addressed. But shutting down or severely limiting prediction markets isn't the answer. The CFTC already has strong tools to combat manipulation and enforce laws against insider trading. Use those existing powers rather than punishing everyone by restricting access to these valuable markets. This ties into Questions 29 and 30 about insider information and whether informed traders aid price discovery. In my view, they often do, as long as the rules against illegal behavior are enforced.
I'm asking you to support proportionate regulation of prediction markets. Don't ban or over-restrict them. Keep platforms like Kalshi accessible under clear, fair rules that protect users while allowing innovation. Thank you for considering my input.
Sincerely,
Joseph Baker
