Comment Text:
Dear Chairman and Commissioners,
My name is Ella Richardson, and I'm a student in California with a strong interest in economics and public policy. I'm writing to express my support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I've used prediction markets a few times myself, and I believe they offer unique value to society, especially when properly overseen by the CFTC.
As someone studying how information shapes decision-making, I'm struck by how prediction markets consistently outperform polls and pundits in forecasting elections and other public events. The aggregated wisdom of many participants creates data that's just not available elsewhere. This isn't just helpful for traders; it's valuable for journalists, policymakers, and everyday people trying to understand what's likely to happen. I also see real economic purpose in event contracts. They aren't gambling, in my view. They require research and judgment, much like investing in stocks. Plus, they let individuals and businesses hedge real risks, whether it's an election outcome affecting taxes or a policy change impacting a small business.
I'm particularly concerned about the risk of over-restriction or outright bans. If the U.S. pushes prediction markets offshore by making them too hard to operate here, activity will just move to unregulated platforms where there's no consumer protection at all. Regulated markets like Kalshi, under CFTC oversight, are a far safer option. Banning or overly restricting these markets won't stop them; it will just stop Americans from benefiting safely. On a related note, I believe the U.S. should be a leader in financial innovation. We shouldn't cede this space to other countries.
I appreciate that the CFTC is asking for input on specific issues, and I'd like to address a few of your questions. Regarding Public Interest (Questions 7-14), I think prediction markets clearly serve the public by improving price discovery and offering better information for decision-making. On Inside Information (Questions 29-32), I believe informed trading actually helps price discovery and benefits everyone in the market, as long as it's not illegal insider trading. The CFTC already has strong tools to prevent manipulation and insider trading in other derivatives markets; those can be adapted here without broad bans. Finally, on Listed Activities (Questions 15-22), I urge you not to classify event contracts as gaming. They serve legitimate purposes like hedging and forecasting, not mere entertainment.
I understand concerns about manipulation or misuse, but proportionate, targeted regulation is the answer, not categorical prohibitions. The tools are already in place to handle bad actors without punishing everyone else. I respectfully ask the CFTC to support well-regulated prediction markets that allow everyday Americans to participate in a safe, transparent environment while maintaining U.S. leadership in financial innovation.
Thank you for considering my perspective.
Sincerely,
Ella Richardson
