Comment Text:
Dear Chairman and Commissioners,
My name is Balarama Kaka, and I'm a software engineer from Wisconsin. Im writing to express my strong support for the proportionate regulation of prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I actively trade on platforms like Kalshi, and I believe these markets provide immense value to individuals like me and to society as a whole.
As someone in tech, I see prediction markets as a powerful tool for aggregating information and producing accurate forecasts, especially for elections and major public events. Ive relied on platforms like Kalshi to get insights that often beat traditional polls or media predictions. This isnt just useful for traders; it helps everyone by creating better data for decision-making. I also value the freedom to participate in legal, regulated markets. These arent gambling platforms. Trading on event contracts requires research and judgment, much like investing in stocks. They serve real economic purposes, like price discovery, and shouldnt be lumped in with gaming.
I want to address a few specific areas from your ANPR. Regarding public interest and price discovery (Questions 7-14), I believe informed trading actually improves market accuracy and benefits all participants. The data from these markets often becomes public, helping not just traders but also policymakers and regular citizens. On the topic of innovation (also in Questions 7-14), Im concerned that over-restricting prediction markets could push activity to unregulated offshore platforms, which are far less safe. As a tech professional, I think the US should be leading in financial innovation, not ceding ground to other countries. We have the chance to set a global standard here.
I also want to touch on insider trading and manipulation concerns (Questions 29-32). I understand the worry, but the CFTC already has strong tools to address these issues in other derivatives markets. Those same tools can work for prediction markets. Banning or overly restricting these markets to stop a few bad actors would hurt the majority of us who use them responsibly. Plus, regulated platforms like Kalshi have transparency and oversight that offshore sites just dont offer.
Academic research backs this up too. Studies by economists like Robin Hanson and Justin Wolfers show how prediction markets improve information transparency. Id hate to see that potential stifled by heavy-handed rules.
I urge the CFTC to support well-regulated prediction markets with targeted rules that address specific risks without broad bans. Lets keep these markets accessible, safe, and innovative. Thank you for considering my perspective.
Sincerely,
Balarama Kaka
