Comment Text:
Dear Chairman and Commissioners,
My name is John Hamway, and I'm a mechanical engineer from Pennsylvania. I'm 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 myself, and I strongly support their development under fair, proportionate regulation by the CFTC.
As someone who works in tech, I value data and accurate information. Prediction markets have consistently outperformed polls and pundits when it comes to forecasting elections and other public events. Ive seen this firsthand; during the last election cycle, platforms like Kalshi gave me a clearer picture of likely outcomes than any news outlet or survey. This kind of aggregated insight isnt just useful for traders like me. It helps everyone, from journalists to policymakers, make better-informed decisions. Price discovery through these markets is a public good, and I believe the CFTC should encourage it.
I also think regulated prediction markets are a safer, better option than the alternative. If the U.S. over-restricts or bans event contracts, people will just turn to unregulated offshore platforms with no consumer protections. Id much rather trade on a CFTC-registered market like Kalshi, where there are rules and oversight, than take my chances somewhere with no accountability. Regulation keeps us safe, while still letting regular folks like me participate in a legal, transparent system.
On top of that, prediction markets arent gambling, no matter what some might say. They serve real economic purposes, like hedging risks. For instance, Ive used them to offset uncertainty around policy changes that could impact my work in tech, like data privacy laws or tax shifts. Businesses use them too, to manage risks from regulatory or political outcomes. Classifying event contracts as "gaming" ignores their legitimate value. And lets not forget, informed trading actually improves price accuracy, benefiting all participants. The CFTC shouldnt punish everyone by restricting markets just because a few might misuse them.
Im also concerned about U.S. competitiveness. Tech and finance are areas where America should lead, not fall behind. If we over-regulate prediction markets, we risk ceding innovation to other countries. I urge you to consider proportionate rules that target specific risks, like manipulation or insider trading, without broad categorical bans. Regarding your questions 7 and 8 on public interest, I believe innovation and consumer access outweigh the risks, especially with proper oversight. And to question 15 on gaming, Id argue event contracts are distinct from gambling due to their hedging and forecasting utility.
Please support the growth of prediction markets with balanced regulation. Dont let over-restriction push activity offshore or stifle a valuable tool for information and risk management. Thank you for considering my input.
Sincerely,
John Hamway
