Comment Text:
Dear Chairman and Commissioners,
My name is Erik Ramirez, and I'm a trader and investor based in California. I've been active in financial markets for years, and while I'm relatively new to prediction markets, I'm writing to express my strong support for their continued development under thoughtful, proportionate regulation. I appreciate the opportunity to comment on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516.
As someone who values the freedom to participate in legal, regulated markets, I see prediction markets as a unique and powerful tool. They produce forecasts that are often more accurate than polls or pundits, aggregating information in a way that benefits not just traders like me, but society as a whole. I've seen firsthand how traditional sources of information can miss the mark, and I believe these markets offer a clearer picture of what's likely to happen, whether it's an election outcome or an economic indicator.
I also think regulated platforms like Kalshi are far safer than the unregulated offshore alternatives. If the CFTC over-restricts or bans these markets, it won't stop people from participating. It will just push activity to less transparent, riskier venues outside US jurisdiction. I'd much rather trade on a platform overseen by the CFTC, where there are protections against manipulation and fraud. Speaking of manipulation, I understand the concern about insider trading, but banning entire markets to stop a few bad actors feels like punishing everyone else. The CFTC already has tools to address these issues, and they should use them instead of broad prohibitions.
Prediction markets aren't just about speculation for me. They have real economic value. Individuals and businesses can hedge risks tied to political or economic events, like a policy change that might impact my investments. Classifying event contracts as "gaming" doesn't make sense when they serve legitimate purposes like price discovery and risk management. And as a trader, I believe informed trading actually improves price accuracy, benefiting all participants, not just the informed few.
I'm also concerned about the US falling behind. We should be leading in financial innovation, not ceding ground to other countries with less oversight. In response to some of the questions in the ANPR, particularly Questions 7 and 8 under Public Interest, I urge you to balance innovation with consumer protection by focusing on targeted rules rather than categorical bans. On Question 15 under Listed Activities, I believe event contracts should be distinguished from gaming based on their economic utility, not lumped together.
I hope the CFTC will support the growth of prediction markets with regulations that address specific risks without stifling access or innovation. Thank you for considering my perspective as you shape these rules.
Sincerely,
Erik Ramirez
