Comment Text:
Dear Chairman and Commissioners,
My name is Steven Mallia, and I'm an everyday citizen from Illinois. I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I actively trade on regulated prediction markets like Kalshi, and I strongly support their continued operation under fair, proportionate regulation.
I believe prediction markets are incredibly valuable, not just for me but for society as a whole. When I trade on Kalshi, I'm not just guessing or gambling. I'm researching, analyzing news, and making informed decisions about events like elections or economic indicators. The prices on these markets often give better insights than polls or pundits. I've seen firsthand how they can predict outcomes with surprising accuracy, which helps me make smarter personal decisions, like planning around potential policy changes. This kind of information should be available to everyone, not locked behind closed doors with big institutions.
What worries me is the idea of banning or over-restricting these markets. I choose to trade on a regulated platform like Kalshi because it's safe, transparent, and accountable under CFTC oversight. If heavy restrictions push activity to unregulated offshore platforms, people like me lose that protection. It's not hard to find those offshore sites, but I'd much rather stay within a system that has rules and safeguards. Regulation should keep us safe, not drive us away.
I also want to push back on the notion that event contracts are just "gaming." Trading on these markets requires the same kind of judgment and analysis Id use for stocks or commodities. It's about real-world events and real economic impacts, like hedging against a policy shift that could affect my costs. Classifying this as gambling feels like a misstep when the purpose is so clearly tied to price discovery and risk management.
On a bigger scale, I think the US has a chance to lead in financial innovation here. Prediction markets are a new frontier, and if we over-regulate or ban them, we're just handing the advantage to other countries. I'd hate to see that happen. In response to some of your specific questions, like those in Topic Area B on public interest (Questions 7-14), I believe the CFTC should prioritize innovation while addressing risks with targeted rules. And for Topic Area C on listed activities (Questions 15-22), I urge you not to label these contracts as gaming but to recognize their legitimate economic value.
I'm not saying there aren't risks. Manipulation or insider trading are real concerns, but the CFTC already has tools to tackle those issues. Broad bans punish regular people like me instead of focusing on the bad actors. I hope you'll support proportionate regulation that lets prediction markets thrive while addressing specific problems with clear, focused rules.
Thank you for considering my perspective. I want to see these markets grow in a safe, regulated way.
Sincerely,
Steven Mallia
