Comment Text:
Dear Chairman and Commissioners,
My name is Tyler Hooks, and I'm a student from Texas with a strong interest in economics and public policy. I've been actively trading on prediction markets like Kalshi for the past year, and Im writing to express my support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to society and to individuals like me, and I urge the CFTC to adopt proportionate regulations rather than overly restrictive bans.
As a student, I've seen firsthand how prediction markets offer insights you can't get from polls or pundits. I've followed election forecasts on Kalshi, and the market prices often predict outcomes more accurately than traditional surveys. This isn't just useful for traders; it helps everyone, from journalists to policymakers, make sense of complex events. Beyond forecasting, these markets let people hedge real risks. For instance, I've used them to offset uncertainties around economic indicators like inflation data, which impact my budget planning as a student. This isn't gambling. It takes research and judgment, much like trading stocks or commodities. Classifying event contracts as "gaming," as discussed in Questions 15-22, ignores their legitimate economic purpose.
I'm also concerned about the alternative to regulation. If the CFTC over-restricts or bans these markets, activity will just move to unregulated offshore platforms, which are far less safe. Kalshi, as a CFTC-registered market, has transparency and oversight. Pushing users offshore undermines that safety net. Plus, the US should be leading in financial innovation, not ceding ground to other countries. I think the CFTC already has strong tools to tackle issues like manipulation and insider trading, as mentioned in Questions 1-6 and 29-32. Use those tools instead of broad prohibitions. Banning entire markets to stop a few bad actors punishes everyone else. And honestly, informed trading isn't a problem; it improves price discovery and makes the market's predictions sharper, benefiting all participants.
I appreciate the CFTC's concern about risks, as raised in Questions 7-14 on balancing innovation and consumer protection. Yes, there are challenges like potential manipulation, but those exist in every financial market. Targeted rules addressing specific issues are better than categorical bans. Let's not throw out a valuable tool just because its not perfect.
In closing, I urge the CFTC to support prediction markets with fair, proportionate regulation. These markets democratize information, help hedge real risks, and position the US as a leader in financial innovation. Please don't over-restrict or ban them. Thank you for considering my perspective as a student and active market participant.
Sincerely,
Tyler Hooks
