Comment Text:
Dear Chairman and Commissioners,
My name is Omar Arias, 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 I'm writing to express my strong support for well-regulated prediction markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to people like me, as well as to society at large, and I hope the CFTC will craft rules that allow them to thrive under fair oversight.
As a trader, I use prediction markets to hedge personal and business financial risks. For example, I've traded contracts tied to election outcomes and Federal Reserve decisions because they directly impact my investments and tax planning. This isn't gambling to me; it's a practical tool, much like trading futures or options to manage uncertainty. Beyond my own use, I see how these markets produce forecasts that are often more accurate than polls or pundits. I've watched Kalshi's election predictions cut through media noise and give clearer signals about what's likely to happen. That kind of information isn't just helpful for traders; it's valuable for the public and even policymakers who need reliable data to make decisions.
I'm also concerned about U.S. competitiveness in financial innovation. If we over-restrict prediction markets here, we're just pushing activity to unregulated offshore platforms where there's no consumer protection. I've seen those sites. They're riskier, less transparent, and often don't have the safeguards that a CFTC-registered market like Kalshi offers. Regulation should keep these markets safe and accessible here at home, not drive them away. Plus, academic research backs this up. Studies I've read show prediction markets are excellent at aggregating information and improving transparency, something we need more of in public decision-making.
I want to address a few of your specific questions from the ANPR. On Question 7 under Public Interest, I believe prediction markets serve the public good by enhancing price discovery and risk management, outweighing concerns if properly regulated. For Question 29 under Inside Information, I think informed traders actually improve market accuracy, and existing laws against insider trading should be enforced rather than banning entire markets. And on Question 33 regarding Classification, I urge the CFTC to avoid overly burdensome rules that could stifle small entities or individual traders like me.
I understand there are real concerns about manipulation or misuse, but the CFTC already has powerful tools to combat that. Banning or overly restricting prediction markets would punish honest participants and limit access to valuable information. Instead, I ask that you support proportionate regulation that addresses specific risks while allowing these markets to operate and innovate within a safe, transparent framework.
Thank you for considering my perspective.
Sincerely,
Omar Arias
