Comment Text:
Dear Chairman and Commissioners,
My name is Joseph Kendrick, and I'm just a regular citizen from Virginia writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I actively trade on platforms like Kalshi, and I believe well-regulated prediction markets are valuable for people like me and for society as a whole. I want to urge the CFTC to support proportionate regulation rather than over-restricting or banning these markets.
I use prediction markets to hedge financial risks that affect my life. With the new gambling tax making other options less appealing, platforms like Kalshi have been a real help. For instance, Ive traded on election outcomes because they impact my taxes and personal budget. Being able to hedge against those uncertainties gives me a sense of control, and its not gambling. It takes research and judgment, just like trading stocks or commodities. Classifying event contracts as "gaming" feels wrong when they serve real economic purposes like hedging and price discovery.
Ive seen firsthand how prediction markets often forecast events like elections more accurately than polls or pundits. That kind of information isnt just useful for traders; it helps everyone make better decisions, from regular folks to policymakers. I also believe that allowing everyday people like me to participate makes these markets stronger. Informed trading improves price accuracy, and shutting out regular citizens would only concentrate that valuable data with big institutions.
Im not blind to the risks, though. Manipulation and insider trading are real concerns, but the CFTC already has strong tools to tackle those issues in other markets. Use those same powers here instead of broad bans. And lets be honest, over-restricting prediction markets wont stop trading; itll just push people to unregulated offshore platforms where theres no consumer protection at all. Id much rather trade on a regulated U.S. market like Kalshi, where theres oversight, than take my chances elsewhere.
On some of the specific questions in the ANPR, Id like to address a few points. For Question 7 under Public Interest, I think prediction markets clearly benefit society through better forecasting and risk management. For Question 15 on Listed Activities, I urge you not to label these contracts as gaming when theyre about legitimate economic activity. And on Question 29 about Inside Information, I believe informed traders often improve price discovery, as long as existing laws against insider trading are enforced.
The U.S. has a chance to lead in financial innovation with prediction markets. We shouldnt cede that to other countries by over-regulating. Academic research backs this up, showing how these markets aggregate information efficiently. So, I ask the CFTC to focus on targeted rules that address specific risks without banning broad categories of contracts or limiting access for regular people like me.
Thank you for considering my perspective. I strongly support proportionate regulation of prediction markets to keep them safe, accessible, and innovative.
Sincerely,
Joseph Kendrick
