Comment Text:
Dear Chairman and Commissioners,
My name is Joseph Talbot, and I'm a trader and investor based in Georgia. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I strongly support the development of well-regulated prediction markets in the United States, and I want to share why they matter to me and why I believe the CFTC should regulate them proportionately rather than restrict or ban them.
As a trader, I value the freedom to participate in legal, regulated markets. Platforms like Kalshi provide a safe, transparent space for me to engage with event contracts, whether I'm hedging personal financial risks or making informed trades based on my research. For example, I've used prediction markets to hedge against potential policy changes that could impact my investments, like shifts in tax policy or regulatory decisions tied to election outcomes. This isn't gambling, it's a legitimate way to manage real-world risks, much like trading futures or options in other markets. Classifying these contracts as "gaming" ignores their economic purpose, and I urge the CFTC to recognize this distinction when addressing questions like those in Topic Area C (Questions 15-22) about defining gaming versus legitimate market activity.
I'm also concerned about what happens if the CFTC over-restricts or bans these markets. I've seen unregulated offshore platforms out there, and they're far riskier, with no oversight or consumer protections. If the U.S. shuts down regulated prediction markets, people like me won't stop trading, we'll just be pushed to less safe venues. That doesn't solve any problems, it makes them worse. On a related note, as someone who cares about U.S. competitiveness, I believe we should be leading in financial innovation. Letting other countries take the lead by over-regulating here at home would be a missed opportunity. I hope the CFTC considers these points when looking at Topic Area B (Questions 7-14) on balancing innovation and consumer protection.
Another thing I want to highlight is the value of informed trading. When people bring their knowledge to the market, whether it's about politics, economics, or other events, the prices get more accurate. That benefits everyone, not just traders. It's not insider trading if it's based on public research or personal insight, and I think the CFTC's existing tools to combat actual manipulation or fraud are enough to handle bad actors without broad bans. I'd encourage you to explore this in Topic Area E (Questions 29-32) on inside information and price discovery.
In closing, I ask the CFTC to support proportionate, targeted regulation for prediction markets. Focus on specific risks like manipulation with the tools you already have, rather than imposing categorical restrictions that hurt law-abiding traders like me. Let's keep these markets safe, accessible, and innovative right here in the U.S.
Thank you for considering my input.
Sincerely,
Joseph Talbot
