Comment Text:
Dear Chairman and Commissioners,
My name is Jonathan Sims, and Im a trader and investor from Tennessee. I work in professional liability insurance, and on the side, I actively trade on prediction markets like Kalshi and Polymarket. Im writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516, to express my strong support for proportionate regulation of these markets. I believe they provide unique value to individuals like me, to businesses, and to society as a whole.
I rely on prediction markets not just as a source of news but as a tool to hedge risks tied to weather, economic shifts, and stock trading events. The forecasts these markets produce are often more accurate than polls or pundits. Ive seen this firsthand, and its backed by academic research showing how these platforms aggregate information efficiently. That kind of data transparency is invaluable, and its something we should protect, not restrict. Beyond that, these markets let regular folks like me participate in a legal, regulated space. Shutting that down would just push activity to offshore platforms with no oversight, which helps no one.
I also want to stress that event contracts arent gaming. They serve real economic purposes. Ive hedged my own risks through these markets, and Ive recommended them to friends and colleagues. For instance, I advised a store owner friend to hedge against business losses from a snowstorm by trading on the likelihood of heavy snow in our city. Another time, I suggested to a government employee friend that they trade on the odds of a prolonged government shutdown, helping them earn some income while their pay was withheld. These arent bets; theyre practical ways to manage uncertainty.
Addressing some of your specific questions, like those in Topic Area B on public interest (Questions 7-14), I believe prediction markets balance innovation with consumer protection by offering price discovery and risk management tools that traditional markets cant match. On Topic Area C (Questions 15-22), classifying these contracts as gaming would be a mistake; theyre no different from other derivatives used for hedging. And in Topic Area E (Questions 29-32), while insider trading is a concern, the CFTC already has tools to combat it. Banning entire markets over a few bad actors punishes everyone else.
The U.S. should lead in financial innovation, not cede ground to other countries. I urge you to craft rules that address specific risks without over-restricting access. Lets keep prediction markets open, transparent, and regulated right here at home.
Sincerely,
Jonathan Sims
