Comment Text:
Dear Chairman and Commissioners,
My name is Andrew McInnis, and I'm a trader and investor based in South Carolina. I've been actively trading on prediction markets like Kalshi and Polymarket for a while now, and Im writing to express my strong support for well-regulated prediction markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to people like me and to society as a whole, and I urge the CFTC to adopt proportionate regulations rather than overly restrictive rules or bans.
As a trader, Ive seen firsthand how prediction markets offer information you cant get anywhere else. Their forecasts on elections and public events consistently beat polls and pundits. Ive used these insights to make better decisions, not just in trading but in understanding the world around me. This isnt gambling, despite what some might claim. Trading on these platforms requires research, analysis, and judgment, much like trading stocks or commodities. Classifying event contracts as "gaming" ignores their real economic purpose, like price discovery and hedging. I often trade to hedge personal risks tied to policy changes or economic shifts, and I know Im not alone in that.
Im also concerned about the alternative if the CFTC over-restricts these markets. Regulated platforms like Kalshi, operating under CFTC oversight, are far safer than unregulated offshore sites. If you ban or limit access here, activity will just move to less transparent venues where consumer protections are nonexistent. Id much rather see the US lead in financial innovation by fostering safe, regulated markets than cede that ground to other countries.
Addressing some of your specific questions, like those in Topic Area B on public interest (Questions 7-14), I believe prediction markets balance innovation with consumer protection when regulated properly. They improve price discovery and benefit everyone, not just traders, by providing better information for public decision-making. On Topic Area E regarding inside information (Questions 29-32), I think informed trading actually helps price discovery; it makes markets more accurate. The CFTC already has robust tools to combat manipulation and insider trading in other derivatives markets. Use those tools here instead of broad bans. And for Topic Area C on listed activities (Questions 15-22), event contracts serve legitimate purposes and shouldnt be lumped in with gaming.
I understand there are risks, like potential manipulation or insider abuse. But banning entire categories of contracts punishes honest participants like me. Targeted rules to address specific bad actors make more sense. The CFTC has the authority to act on fraud and manipulation already; lets build on that.
In closing, I ask the CFTC to support proportionate regulation of prediction markets. Keep them legal and accessible on regulated platforms, and ensure the US remains a leader in financial innovation. Thank you for considering my views.
Sincerely,
Andrew McInnis
