Comment Text:
Dear Chairman and Commissioners,
My name is Logan Bell, and I'm a trader and investor from California, currently pursuing a PhD. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. As someone who actively trades on platforms like Kalshi, I want to express my strong support for well-regulated prediction markets. They're not just a tool for traders like me, but also a valuable resource for society, and I believe the CFTC can strike the right balance with proportionate regulation.
Prediction markets have been incredibly useful in my life, both as a trader and a researcher. The data from Kalshi has been vital for parts of my PhD work, offering insights into public sentiment and forecasts that I can't find in polls or pundit opinions. I've seen firsthand how these markets consistently predict outcomes, like elections or economic events, with more accuracy than traditional sources. This isn't gambling, it's a process of research and judgment, much like trading stocks or commodities. I also use these markets to hedge personal financial risks, such as potential policy changes that could impact my investments or future income. For me, and many others, event contracts serve a real economic purpose.
I'm particularly drawn to questions 7 through 14 in the ANPR, regarding public interest and balancing innovation with consumer protection. I believe regulated markets like Kalshi are far safer than unregulated offshore platforms. If the CFTC over-restricts or bans these markets, activity will simply move to less transparent, riskier venues. The US should be leading in financial innovation, not ceding ground to other countries. Questions 15 through 22, on defining gaming versus legitimate markets, also hit home. Classifying event contracts as gaming ignores their role in price discovery and hedging. They're not slot machines; they're tools for informed decision-making.
On the topic of manipulation and insider trading, raised in questions 29 through 32, I think the CFTC already has robust tools to address these risks. Informed trading actually improves price discovery, benefiting everyone, not just traders. Banning or overly restricting markets to prevent bad actors punishes the wrong people. Instead, focus on targeted enforcement using existing authority. Proportionate regulation, not broad categorical bans, is the way forward.
I understand the need to protect consumers, but shutting down access to legal, regulated markets doesn't solve that problem. It just limits freedom for people like me who use these platforms responsibly, while also providing better information for public decision-making. Please support a framework that allows prediction markets to thrive under fair, balanced oversight.
Thank you for considering my perspective.
Sincerely,
Logan Bell
