Comment Text:
Dear Chairman and Commissioners,
My name is Marwan Kheireddine, and I'm a trader and investor based in New York. I'm writing to express my strong support for the proportionate regulation of prediction markets as outlined in the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). As someone who actively uses these markets for hedging and risk management, I believe they provide unique value to individuals like me, to businesses, and to society as a whole through better information and price discovery.
I've relied on prediction markets to hedge personal and financial risks tied to events like elections and economic policy changes. For instance, during the last election cycle, I used a platform like Kalshi to manage potential impacts on my investment portfolio from policy shifts. The ability to hedge against these uncertainties isn't just helpful, it's essential for someone in my line of work. Beyond my own use, I see how prediction markets consistently outperform polls and pundits in forecasting outcomes. That kind of accuracy isn't just useful for traders, it benefits the public, media, and even policymakers who need reliable data to make decisions.
I also want to stress that event contracts are not gambling. They serve real economic purposes like hedging and price discovery, much like trading stocks or commodities. Classifying them as "gaming" would be a misstep, as I believe they belong in the same category as other legitimate financial instruments. I'm particularly concerned with Questions 15-22 in the ANPR about defining gaming versus legitimate markets. These contracts aren't about luck, they're about research and judgment, and they should be regulated as such.
On the topic of risks like manipulation or insider trading, I understand the concerns raised in Questions 29-32. But the CFTC already has strong tools to combat these issues in other derivatives markets. Those same tools can and should be adapted here. Banning or over-restricting prediction markets doesn't solve the problem, it just pushes activity to unregulated offshore platforms where there's no oversight at all. Regulated markets like Kalshi are far safer for consumers, and I urge the CFTC to prioritize regulation over prohibition. Also, informed trading actually improves price discovery, benefiting all participants, not just a few.
Finally, addressing Questions 7-14 on public interest, I believe the US should lead in financial innovation. If we over-regulate or ban these markets, we're ceding ground to other countries. Proportionate, targeted rules that address specific risks are the way forward, not broad categorical bans. I'm asking the CFTC to support well-regulated prediction markets that allow individuals like me to participate freely in legal, transparent platforms while protecting consumers through smart oversight.
Thank you for considering my input.
Sincerely,
Marwan Kheireddine
