Comment Text:
Dear Chairman and Commissioners,
My name is Steven Zak, and I'm a trader and investor based in California. I've been actively trading on prediction markets like Kalshi for a while now, and Im 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). I believe these markets provide real value to individuals like me, as well as to society at large, and I urge the CFTC to craft rules that support their growth while addressing legitimate risks.
As someone who trades regularly, Ive seen firsthand how prediction markets offer unique information that you cant get from polls or pundits. The prices on platforms like Kalshi often predict election outcomes or other public events more accurately than traditional forecasts. This isnt just helpful for traders; its valuable for anyone paying attention to these events, from journalists to policymakers. Beyond that, these markets let me hedge real risks. For example, Ive used event contracts to offset potential financial impacts from election results that could affect my investments or tax situation. This isnt gambling, its a practical tool, much like trading stocks or commodities based on research and judgment about the world.
I also want to stress that regulated markets are far safer than the alternatives. If the CFTC over-restricts or bans certain event contracts, people like me wont just stop trading. Well be pushed to unregulated offshore platforms with no oversight or consumer protections. Id much rather trade on a CFTC-registered platform like Kalshi, where I know there are rules and safeguards in place. Banning these markets doesnt solve problems; it creates worse ones.
On the topic of classification, I strongly believe event contracts shouldnt be labeled as gaming. They serve legitimate economic purposes, like hedging and price discovery. Trading on these markets takes skill and analysis, not luck. And speaking of price discovery, I think informed trading actually helps everyone. When knowledgeable participants trade, the prices get more accurate, which benefits all of us who rely on that information. Im aware of concerns about insider trading, but those laws already exist. The CFTC has tools to enforce against manipulation and abuse, and Id rather see those enforced than see entire markets shut down over a few bad actors.
Id like to address a couple of specific questions from the ANPR. On Question 8, regarding balancing innovation and consumer protection, I think regulation should focus on transparency and enforcement, not broad restrictions. And on Question 15, about defining gaming, I urge the CFTC to recognize the economic utility of event contracts and not equate them with gambling. My ask is simple: please support proportionate regulation that allows prediction markets to thrive while protecting consumers. Dont ban or over-restrict them.
Thank you for considering my perspective.
Sincerely,
Steven Zak
