Comment Text:
Dear Chairman and Commissioners,
My name is Samuel Lackey, and I'm a student from Texas writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've used prediction markets a few times, mainly to follow along with election forecasts and other public events, and I believe they have real value that deserves thoughtful regulation, not heavy-handed restrictions.
As someone studying and learning about how information shapes decision-making, I see prediction markets as a powerful tool for accurate forecasting. I've watched platforms like Kalshi provide insights on elections and other events that often beat out traditional polls or pundit opinions. This isn't just useful for traders; it's valuable for anyone trying to understand what's likely to happen in the world, including students like me who are trying to make sense of complex issues. I also don't see these markets as gambling. They require research and judgment, much like investing in stocks. Event contracts serve a real purpose by helping aggregate information and letting people put their knowledge to work.
I'm concerned, though, that banning or over-restricting these markets would do more harm than good. If the CFTC clamps down too hard, activity will just move to unregulated offshore platforms where there's no oversight at all. I've read about how some of these offshore sites operate with little transparency, and that seems far riskier to me than a regulated market like Kalshi operating under CFTC rules. Keeping these markets in the US, with proper guardrails, is the safer option. Plus, the US has a chance to lead in financial innovation here. Why let other countries take the lead on something that could shape how we understand and predict major events?
I noticed a few of the questions in the ANPR that relate to my concerns, like Question 7 on balancing innovation with consumer protection and Question 13 on the public interest in these markets. I think the CFTC can strike a balance by setting clear rules to prevent manipulation or insider trading, using the tools you already have, without shutting down entire categories of contracts. Question 15, about defining gaming versus legitimate markets, also hits on something I care about. These aren't games of chance; they're markets driven by real-world analysis.
I urge the Commission to support proportionate regulation of prediction markets. Don't ban or over-restrict them. Keep them regulated here in the US, where they can be monitored and provide real benefits to people like me who value their insights. Thank you for considering my perspective as you shape these rules.
Sincerely,
Samuel Lackey
