Comment Text:
Dear Chairman and Commissioners,
My name is Juan Moreno, and I'm a trader and investor based in Indiana. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing to share my 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 real value to people like me, as well as to the broader public, and I hope the CFTC will craft rules that support their growth while addressing valid concerns.
As a trader, Ive seen firsthand how prediction markets deliver information you cant find anywhere else. Their forecasts on elections and public events consistently outperform polls and pundits. Ive used this data not just for trading, but to better understand whats happening in the world. That kind of transparency helps everyone, from individual citizens to policymakers, make more informed decisions. Price discovery through these markets isnt just some abstract concept; its a practical tool that improves public knowledge.
I also value the freedom to participate in legal, regulated platforms like Kalshi. These markets are safer than unregulated offshore alternatives where theres no oversight. If the CFTC over-restricts or bans certain contracts, itll just push activity to those less safe venues. Plus, prediction markets arent just about speculation for me. They let individuals and businesses hedge real risks. For instance, Ive used them to offset uncertainties tied to policy changes that could impact my investments. Thats not gambling; its smart risk management, no different from other derivatives trading.
Im also concerned about U.S. competitiveness. We should be leading the way in financial innovation, not letting other countries take the lead. Prediction markets are a cutting-edge tool, and the academic research behind them, from economists like Hanson and Wolfers, shows they aggregate information efficiently. Id hate to see us fall behind because of overly broad restrictions.
On specific points in your ANPR, Id like to address Questions 7 and 8 under Public Interest. I believe prediction markets serve the public good through better forecasting and risk management, and the CFTC can balance innovation with consumer protection through targeted rules rather than categorical bans. On Question 15 under Listed Activities, I urge you not to classify these as gaming. Theyre legitimate financial tools. And for Questions 33-40 on Classification and Costs-Benefits, please consider the economic benefits of keeping these markets accessible to smaller participants like me, not just big institutions.
I know there are concerns about manipulation or insider trading, and those are valid. But the CFTC already has strong tools to tackle bad actors, and existing laws ban federal employees from misusing nonpublic information. Shutting down markets to stop a few bad apples punishes the rest of us who play by the rules.
I ask the CFTC to support proportionate regulation of prediction markets. Dont over-restrict or ban them. Craft rules that address specific risks while letting these valuable tools thrive for traders, businesses, and the public.
Sincerely,
Juan Moreno
