Comment Text:
Dear Chairman and Commissioners,
My name is Benjamin Cohen Harel, and I'm a finance professional based in Florida. I work with trade surveillance systems for banks, so I spend my days monitoring for insider trading and other market abuses. I've also used prediction markets a few times myself, and Im writing to support proportionate regulation of these markets as outlined in your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe they offer unique value to individuals, businesses, and society, and I urge the CFTC to regulate them in a way that fosters innovation while addressing risks.
In my line of work, I see firsthand how important accurate information is to financial markets. Prediction markets stand out because they often produce forecasts that beat polls or pundits. I've seen this myself when checking platforms like Kalshi for election or economic outcomes; the aggregated wisdom of traders often cuts through noise better than traditional sources. This isn't just useful for traders like me, but for anyone making decisions, from policymakers to small business owners. Academic research backs this up, showing how these markets efficiently aggregate data. I think the CFTC should consider this public benefit seriously when addressing Questions 7 and 8 on public interest.
I also value the freedom to participate in legal, regulated markets. Platforms like Kalshi, operating under CFTC oversight, are far safer than unregulated offshore alternatives. If the U.S. over-restricts or bans event contracts, activity will just move to less transparent venues. I've monitored enough suspicious trades to know that pushing markets underground makes oversight harder, not easier. This ties into Question 14 on balancing innovation and protection; I believe regulation, not prohibition, is the answer.
Prediction markets also help hedge real risks. For me, trading on economic indicators has been a way to offset personal financial exposure, like timing investments around Fed decisions. Businesses I work with do the same for regulatory or policy risks. These aren't games; theyre tools for managing uncertainty. Classifying event contracts as "gaming" under Questions 15 and 16 ignores their legitimate economic purpose, and I urge the CFTC to recognize their hedging value instead.
Finally, the U.S. should lead in financial innovation. We can't afford to cede ground to other countries by stifling new markets. As someone who tracks global financial trends, I see competitors eager to fill any gap we leave. This speaks to Question 33 on classification and costs; over-regulation could burden small entities and push innovation offshore.
I know there are concerns about manipulation or insider trading, and I get it. I've built systems to catch those exact issues. But the CFTC already has tools to address bad actors without banning entire markets. Focus on enforcing existing rules, not creating barriers. I strongly support well-regulated prediction markets that allow participation while protecting integrity. Please craft rules that enable this balance.
Sincerely,
Benjamin Cohen Harel
