Comment Text:
Dear Chairman and Commissioners,
My name is Joshua De Guzman, and I'm a student in California with a strong interest in economics and public policy. I'm writing to comment on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. As someone who actively trades on regulated platforms like Kalshi, I want to express my support for well-regulated prediction markets and urge the CFTC to adopt a balanced approach that fosters innovation while protecting consumers.
I've seen firsthand how prediction markets provide information that's just not available elsewhere. For elections and major public events, the forecasts on these platforms consistently outperform polls and pundits. As a student, I rely on this data for research and to better understand the world around me. It's not just useful for traders like me; it helps everyone by creating better information for public decision-making. I also believe allowing regular people to participate in these markets is a positive thing. It democratizes access to financial tools and improves price discovery by bringing in diverse perspectives.
I want to address a concern I know the CFTC has about manipulation and insider trading. I get why this is a worry, but the tools to handle these issues already exist. The CFTC has strong authority to go after bad actors in any regulated market, and those powers should be applied to prediction markets too, without resorting to broad bans. Banning or over-restricting these markets won't solve the problem; it will just push activity to unregulated offshore platforms where there's no oversight at all. I'd much rather trade on a safe, regulated platform like Kalshi than be forced to look elsewhere.
I'm also concerned about event contracts being labeled as gaming. Trading on these markets isn't gambling. It requires research, analysis, and judgment about real-world events, much like trading stocks or commodities. These contracts serve real economic purposes, like hedging risks or discovering prices, and I think the CFTC should recognize that distinction when addressing questions 15 to 22 in the ANPR about listed activities.
Finally, I believe the U.S. should be a leader in financial innovation. If we over-regulate or ban prediction markets, we risk ceding ground to other countries. On questions 7 to 14 about public interest, I urge you to balance consumer protection with the need to stay competitive. Proportionate, targeted rules that address specific risks are far better than categorical restrictions that punish everyone.
Prediction markets have real value, both for individuals like me and for society as a whole. I ask the CFTC to support their growth with thoughtful regulation, not heavy-handed limits. Thank you for considering my input.
Sincerely,
Joshua De Guzman
