Comment Text:
Dear Chairman and Commissioners,
My name is Brian Onofre, and I'm a student from Illinois. I've been following the discussion around prediction markets with great interest, and I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). As someone who actively trades on platforms like Kalshi, I want to share why I believe these markets should be supported with fair, proportionate regulation rather than restrictive rules or bans.
I got into prediction markets because I was fascinated by how they can predict outcomes better than polls or pundits. I've seen firsthand how the prices on Kalshi often reflect a clearer picture of what's likely to happen, whether it's an election or an economic indicator. That kind of information isn't just useful for traders like me, it's valuable for everyone, from journalists to policymakers. As a student, I also see this as a way to engage with real-world events in a meaningful way, learning to analyze data and think critically about probabilities.
What worries me is the idea of over-restricting or banning these markets. I trade on a regulated platform like Kalshi because I trust the oversight and transparency. If the CFTC clamps down too hard, people like me might turn to unregulated offshore platforms, which are far less safe and lack accountability. I've read about how the CFTC already has strong tools to tackle issues like manipulation and insider trading in other derivatives markets. I believe those same tools can work for event contracts without needing broad prohibitions. Banning entire categories of contracts would just push activity to places where there's no oversight at all.
I also don't think event contracts should be labeled as gaming. Trading on prediction markets isn't a game of chance. It takes research and judgment, much like trading stocks or commodities. These markets serve real purposes, like price discovery and even hedging against uncertainty. I'm especially concerned about U.S. competitiveness in financial innovation. If we over-regulate, we risk losing ground to other countries that are more open to new ideas in finance. I want the U.S. to lead on this, not fall behind.
To address some of the specific questions in the ANPR, I think Question 7 on balancing innovation and consumer protection is key. Regulation should focus on protecting traders without stifling the benefits of these markets. On Question 15, regarding gaming definitions, I urge the CFTC to recognize the economic value of event contracts and not equate them with gambling. And for Question 29 about insider trading, I believe existing laws and CFTC powers are enough to handle bad actors without punishing the rest of us.
I strongly support well-regulated prediction markets. Please craft rules that address specific risks without banning or overly restricting these valuable tools. Thank you for considering my perspective.
Sincerely,
Brian Onofre
