Comment Text:
Dear Chairman and Commissioners,
My name is Josue Hernandez, and I'm a trader and investor based in California. I've been trading stocks for years, and I also actively participate in prediction markets like Kalshi. 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 real value to people like me and to society as a whole, and I urge you to create a fair regulatory framework rather than imposing bans or overly restrictive rules.
As someone who trades stocks, I see prediction markets as a critical tool for hedging financial risks. For example, I use platforms like Kalshi to hedge against events like interest rate changes or election outcomes that could impact my portfolio or personal finances. This isn't just playing around; it's a practical way to manage uncertainty. Beyond my own needs, Ive seen how prediction markets often produce forecasts that are way more accurate than polls or pundits. That kind of information isnt just helpful to traders; its valuable to everyone, from policymakers to regular folks trying to make sense of the world.
I also want to stress that event contracts are not gambling. They serve real economic purposes, like price discovery and risk management. Trading on these markets takes research and judgment, just like trading stocks or commodities. Labeling them as "gaming" feels like a misstep to me, and I hope the CFTC will recognize their legitimate role when addressing questions like 15 through 22 in your ANPR about defining gaming versus valid market activities.
Another concern I have is what happens if these markets get over-restricted or banned. Regulated platforms like Kalshi are safe and transparent, with oversight to prevent manipulation or fraud. If you make it too hard to operate here, people will just turn to unregulated offshore platforms, which are far riskier for everyone. I think the CFTC should focus on keeping activity in regulated spaces, as touched on in questions 7 through 14 about balancing innovation and consumer protection.
Lastly, I believe informed trading actually helps markets work better. When people with good information participate, prices get more accurate, and that benefits all of us. Banning markets to stop a few bad actors, like potential insiders, feels like punishing the wrong people. The CFTC already has tools to tackle manipulation and insider trading, and Id rather see those enforced than see whole markets shut down. This ties into questions 29 through 32 in your notice about inside information and price discovery.
I ask that the CFTC support proportionate regulation for prediction markets. Let regular people like me continue to participate in legal, regulated markets while addressing specific risks with targeted rules. Dont let bans or heavy restrictions push this activity offshore or underground. Thank you for considering my input.
Sincerely,
Josue Hernandez
