Comment Text:
Dear Chairman and Commissioners,
My name is Cole Sprouse, and I'm a software engineer from California. I work as a freelance developer for clients who trade on prediction markets, and I also trade on platforms like Kalshi myself to supplement my income. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) because these markets are not just a hobby for me, they're my livelihood. If they were banned or overly restricted, I'd be out of a job, and I know many others who would be hurt too.
I strongly support well-regulated prediction markets because they provide value that you can't find elsewhere. I've seen firsthand how their prices often predict outcomes better than polls or pundits. As a tech professional, I appreciate how they aggregate data into actionable insights, which helps everyone, not just traders. This ties directly to your questions on price discovery in Topic Area B (Questions 7-14). I believe these markets improve public decision-making by offering transparent, real-time information, and that's a public good worth protecting.
I'm also worried about US competitiveness in financial innovation. If we over-regulate or ban these markets, activity will just move to unregulated offshore platforms where there's no consumer protection. I've traded on Kalshi, and I feel safer knowing it's under CFTC oversight. Pushing traders offshore, as discussed in your public interest questions (Questions 7-14), would be a step backward. The CFTC already has strong tools to handle manipulation and insider trading, as noted in Topic Area A (Questions 1-6). Let's use those instead of broad restrictions.
Another concern is the idea of classifying event contracts as gaming, which comes up in Topic Area C (Questions 15-22). I don't see this as gambling at all. Trading takes research and judgment, just like investing in stocks. These contracts serve real economic purposes, like hedging risks or discovering prices. Plus, academic research, which I follow closely in my field, backs this up. Studies show prediction markets improve information aggregation, and informed trading, as discussed in Topic Area E (Questions 29-32), makes prices more accurate for everyone.
Finally, I value the freedom to participate in legal, regulated markets. Banning or over-restricting them would limit my ability to engage in a system that benefits me financially and intellectually. I urge the CFTC to support proportionate regulation that addresses specific risks without punishing the many honest participants like me.
Thank you for considering my perspective.
Sincerely,
Cole Sprouse
