Comment Text:
Dear Chairman and Commissioners,
My name is Griffin Smith, and I'm a finance professional from Tennessee. I've been working in the financial sector for over a decade, analyzing markets and helping clients make informed decisions. I also actively trade on prediction markets like Kalshi, and I'm writing to express my strong support for proportionate regulation of these markets as outlined in your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe well-regulated prediction markets offer significant benefits to individuals like me, businesses, and society as a whole.
As someone who trades on platforms like Kalshi, Ive seen firsthand how prediction markets provide unique information that you just cant get from polls or pundits. Their forecasts on elections, economic indicators, and other events are often more accurate because they aggregate real-time insights from a wide range of participants. This isnt gambling; its a serious process that requires research and judgment, much like trading stocks or commodities. Classifying event contracts as "gaming" would be a mistake when they serve real economic purposes, like price discovery and hedging risks. For example, Ive used these markets to hedge against policy changes that could impact my personal finances or clients investments, such as shifts in interest rates or regulatory outcomes.
I also want to stress that regulated markets are far safer than the alternatives. If the CFTC over-restricts or bans prediction markets, activity will just move to unregulated offshore platforms where theres no oversight or consumer protection. Id much rather trade on a CFTC-registered platform like Kalshi, knowing there are rules in place to prevent manipulation or fraud. The CFTC already has strong tools to address issues like insider trading and market manipulation. Use those tools instead of broad categorical bans that punish legitimate participants.
On the topic of informed trading, I believe it actually improves price discovery, which benefits everyone, not just traders. Your questions 29-32 in the ANPR touch on this, and Id argue that the presence of informed traders makes prediction market prices more reliable for the public. And from a broader perspective, as raised in questions 7-14 about public interest, the U.S. should be leading in financial innovation. We cant afford to cede this space to other countries by over-regulating a promising new market.
Im not blind to the risks. Consumer protection matters, and I support targeted rules to address specific concerns like manipulation. But shutting down or overly restricting prediction markets isnt the answer. I urge the CFTC to adopt a balanced approach with proportionate regulation that allows individuals and businesses to participate in legal, regulated markets while maintaining necessary safeguards.
Thank you for considering my input. I strongly encourage you to support the responsible growth of prediction markets through thoughtful regulation, not restrictive bans.
Sincerely,
Griffin Smith
