Comment Text:
Dear Chairman and Commissioners,
My name is Timothy Huang, and I'm a trader and investor based in New York. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I strongly support the idea of well-regulated prediction markets, and I hope my perspective as someone who uses these platforms can help inform your approach.
I got into prediction markets because they offer insights I can't find anywhere else. I've seen firsthand how their forecasts often beat out polls or pundits when it comes to predicting election outcomes or economic indicators. That kind of accuracy isn't just useful for traders like me; it helps everyone, from businesses to regular folks trying to make sense of the world. Beyond that, these markets let me hedge real risks. For instance, Ive used event contracts to offset potential losses tied to policy changes that could impact my investments. This isn't gambling. Its a calculated decision based on research and judgment, much like trading stocks or futures.
I know there are concerns about consumer protection, and I get that. But pushing activity to unregulated offshore platforms by over-restricting here at home is not the answer. I've traded on regulated platforms like Kalshi, and the transparency and oversight make a huge difference. The U.S. has a chance to lead in financial innovation with prediction markets, and I think we should seize it. If we impose heavy-handed bans, other countries will step in, and we'll lose out on both innovation and safety for American traders.
Looking at some of the specific questions in the ANPR, I want to address a few points. On Questions 7-14 about public interest, I believe prediction markets serve a clear economic purpose through price discovery and risk management, far beyond any notion of gaming. On Questions 29-32 regarding inside information, I think informed trading actually improves price accuracy and benefits all participants, as long as existing laws against insider trading are enforced. And in response to Questions 33-40 on costs and classification, I urge you to focus on proportionate regulation. Targeted rules to address specific risks like manipulation make more sense than broad categorical bans that could stifle a growing market.
Im not saying there are no risks. There are. But the CFTC already has tools to tackle manipulation and insider trading in other markets, and those can be adapted here. I hope you'll support a regulatory framework that allows prediction markets to thrive while addressing real concerns with focused solutions. Let's keep this innovation alive and safe for people like me who rely on it.
Thank you for considering my input.
Sincerely,
Timothy Huang
