Comment Text:
Dear Chairman and Commissioners,
My name is Levi Harber, and I'm a student and academic based in the United States. I'm writing to express my support for the proportionate regulation of prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I'm relatively new to these markets, but I've been following their development with great interest, both as a learner and as someone who believes in their potential to benefit society.
As a student, I value the way prediction markets aggregate information and provide insights that are often more accurate than traditional polls or expert opinions. Academic research, which I've studied in my courses, consistently shows that these markets improve data transparency and forecasting. They're not just tools for traders; they offer real value to the public and policymakers who need reliable information. Beyond that, I see event contracts as serving genuine economic purposes, not as gambling. They allow people to hedge against personal or business risks, like political changes or economic shifts that could impact livelihoods. This hedging utility is a legitimate function, akin to other financial instruments, and shouldn't be dismissed as mere betting.
I'm particularly concerned about the risks of over-restricting or banning these markets. If the U.S. imposes heavy-handed rules, activity will likely move to unregulated offshore platforms where there are no safeguards. Regulated markets, like Kalshi on a CFTC-registered DCM, are far safer for participants and provide accountability. Pushing traders to less secure venues doesn't solve problems; it creates new ones. On the flip side, the U.S. has a chance to lead in financial innovation here. We shouldn't cede that opportunity to other countries by stifling a promising sector.
Id like to address a couple of specific questions from the ANPR. On Question 7, regarding balancing innovation and consumer protection, I believe the CFTC can achieve both by focusing on targeted rules against manipulation and insider trading, rather than broad prohibitions. And on Question 15, about defining gaming versus legitimate markets, I urge you to recognize that event contracts have clear economic uses like hedging and price discovery, distinguishing them from gambling.
I understand there are concerns about manipulation or insider trading, but the CFTC already has tools to address these issues in other markets. Apply those same powers here instead of punishing everyone by limiting access. Prediction markets can be a force for good if regulated thoughtfully. I respectfully ask that you support proportionate regulation that allows these markets to grow while protecting participants, rather than imposing bans or overly restrictive rules that drive innovation and activity elsewhere.
Thank you for considering my input.
Sincerely,
Levi Harber
