Comment Text:
Dear Chairman and Commissioners,
My name is Luke Elliott, and I'm a student based in California. I'm writing to express my strong support for the proportionate regulation of prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). As someone who actively trades on platforms like Kalshi, Ive seen firsthand the value these markets provide, and I believe the CFTC has a unique opportunity to foster innovation while protecting consumers.
I got into prediction markets because I wanted better information about elections and public events. Traditional polls and pundits often miss the mark, but platforms like Kalshi aggregate real-time insights through trading. The prices reflect what people actually think, backed by their own money, and Ive found this data more reliable than most forecasts out there. Its not just useful for me as a trader; its valuable for anyone trying to understand whats happening in the world, from journalists to policymakers.
I also want to push back on the idea that event contracts are gambling. Trading on these markets isnt a game of chance. It takes research, analysis, and judgment, much like investing in stocks or other financial instruments. These contracts serve real economic purposes, like price discovery and even hedging against uncertainty. Labeling them as gaming undercuts their legitimacy and ignores their benefits. On this point, Id direct your attention to Questions 15-22 in the ANPR about defining gaming versus legitimate markets. My view is clear: event contracts are not gambling and should be regulated as financial tools.
Im also concerned about what happens if the CFTC over-restricts or bans these markets. Ive seen unregulated offshore platforms out there, and theyre far riskier than a CFTC-registered exchange like Kalshi. Banning or overly limiting prediction markets in the US wont stop trading; itll just push people like me to less safe venues with no oversight. The US should be leading in financial innovation, not ceding ground to other countries. Regulated markets are the answer, not prohibitions.
On the topic of insider trading or manipulation, raised in Questions 29-32, I believe informed trading actually improves price discovery and benefits everyone in the market. Yes, bad actors need to be addressed, but the CFTC already has tools to tackle fraud and manipulation. Broad categorical bans, as discussed in Questions 23-28, arent the solution. Targeted, proportionate rules that address specific risks make more sense and avoid punishing legitimate participants.
I urge the CFTC to support the growth of prediction markets with fair, balanced regulation. Dont let over-restriction drive innovation and activity offshore. These markets provide unique value, and with the right oversight, they can thrive while protecting consumers like me.
Sincerely,
Luke Elliott
