Comment Text:
Dear Chairman and Commissioners,
My name is David Scherer, and I'm a stay-at-home dad from Washington state. I'm just a regular person, not an expert or a big investor, but Ive recently started exploring prediction markets and see a lot of value in them. I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I strongly support well-regulated prediction markets and believe the CFTC should focus on fair oversight rather than bans or heavy restrictions.
Im new to these markets, but Ive already seen how they can provide information you cant get from polls or pundits. For elections and public events, their forecasts often seem sharper, and I think thats a public good. Better information helps everyone, from regular folks like me to policymakers. Plus, I value the freedom to participate in legal, regulated markets. Its not just for Wall Street; its a way for everyday people to have a stake in understanding whats happening in the world. And honestly, I dont see this as gambling. It takes research and judgment, just like investing in stocks. Classifying event contracts as gaming (as raised in Questions 15-22) feels wrong to me; they serve real purposes like price discovery and even hedging risks.
That said, Im worried about fairness. Ive noticed something troubling in the Kalshi weather markets. It looks like someone might be making large bets just a minute before a temperature increase is reported. This screams insider knowledge or manipulation, and it needs to be investigated and stopped immediately. Normal people like me cant participate if the game feels rigged. I know the CFTC already has tools to tackle manipulation and insider trading (as discussed in Questions 1-6 and 29-32). I urge you to use them aggressively rather than banning or over-restricting these markets. Shutting things down to stop a few bad actors punishes the rest of us.
I also believe regulated platforms like Kalshi are much safer than unregulated offshore alternatives. If the CFTC over-restricts, people will just go to sketchy foreign sites with no oversight. Thats worse for consumer protection. On top of that, the US should be leading in financial innovation, not handing the advantage to other countries (relevant to Questions 7-14 on public interest). Academic research backs this up too; studies show prediction markets aggregate information better than most other methods. Lets not ignore that data.
Im asking you to support proportionate regulation of prediction markets. Focus on stopping manipulators and insiders with the tools you have, and dont let broad bans or heavy rules push activity offshore or kill a useful tool for regular people like me. Thank you for considering my input.
Sincerely,
David Scherer
