Comment Text:
Dear Chairman and Commissioners,
My name is Zejun Wu, and I'm a software engineer based in California. I've been working in tech for several years, and in my personal time, I actively trade on prediction markets like Kalshi and Polymarket. I'm writing to express my strong support for proportionate regulation of prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide real value to people like me and to society at large, and I urge the CFTC to craft rules that encourage innovation while addressing specific risks, rather than imposing broad restrictions or bans.
As someone in tech, I often deal with uncertainty around policy changes or economic shifts that can impact my industry, my investments, and even my personal finances. Prediction markets have been a useful tool for me to hedge some of that risk. For instance, I've traded on contracts tied to interest rate decisions or election outcomes that could affect my stock options or tax planning. This isn't just speculation; it's a practical way to manage real financial exposure. Beyond my own use, I've seen how these markets consistently produce forecasts that are more accurate than polls or pundit opinions. That kind of aggregated information is valuable not just to traders, but to anyone making decisions, whether in business or public policy.
I also value the freedom to participate in legal, regulated markets. Platforms like Kalshi, which operate under CFTC oversight, offer a safe and transparent way to trade event contracts. If the CFTC over-restricts or bans these markets, I worry that activity will just shift to unregulated offshore platforms, which are far riskier for participants and harder to monitor. Keeping prediction markets regulated in the U.S. benefits everyone by ensuring accountability and consumer protection.
On the topic of classification, I strongly believe event contracts are not gambling. They serve legitimate economic purposes like hedging and price discovery. Trading on these markets requires research and judgment, much like trading stocks or futures. Labeling them as "gaming" feels inaccurate and dismissive of their real utility. I'm glad to see the CFTC asking about this in Questions 15-22 under Listed Activities, and I encourage you to define these contracts based on their economic function, not mischaracterize them as mere entertainment.
Finally, regarding Questions 29-32 on inside information, I think informed trading actually improves price discovery and benefits all participants. The CFTC already has tools to address insider trading and manipulation in other markets; those same tools can apply here without punishing the majority of honest traders.
Prediction markets are a powerful tool for better information and financial planning. I respectfully ask the CFTC to support their growth with balanced regulation, not restrictive bans that could push innovation and activity overseas. Thank you for considering my input.
Sincerely,
Zejun Wu
