Comment Text:
Dear Chairman and Commissioners,
My name is Kyle Johnson, and I'm a trader and investor based in Massachusetts. I run a small business as a liquidity provider, primarily in the NHL market, and I actively trade on prediction markets like Kalshi. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my strong support for well-regulated prediction markets. I believe they offer unique value to society and to people like me who participate in financial markets.
I've seen firsthand how prediction markets provide information you can't get anywhere else. The forecasts on platforms like Kalshi are often more accurate than what you hear from polls or pundits on TV. As someone who makes a living analyzing and providing liquidity to markets, I rely on accurate data to make decisions. These platforms aggregate real-world insights in a way that benefits not just traders but anyone who pays attention, from policymakers to regular citizens.
I also worry about the risk of pushing this activity into the shadows. Regulated markets like Kalshi, under CFTC oversight, are far safer than unregulated offshore platforms. If we over-restrict or ban prediction markets here, people won't stop trading; they'll just go to less transparent, riskier venues. That hurts everyone. The U.S. should be leading in financial innovation, not ceding ground to other countries. Keeping these markets regulated domestically ensures accountability and protects participants.
I'm not saying there aren't risks. I know concerns like insider trading or manipulation come up, and they should be addressed. But the answer isn't broad categorical bans. It's proportionate, targeted regulation. The CFTC already has tools to combat manipulation in other markets, and those can be adapted here. Shutting down entire markets to stop a few bad actors punishes honest participants like me. On the flip side, informed trading actually helps. When knowledgeable traders participate, it improves price discovery, making the market more accurate and useful for everyone. This ties directly to Questions 29 and 30 in the ANPR about the role of informed traders. I believe their participation is a net positive if paired with strong oversight.
As someone who trades for a living, I also see prediction markets as a legitimate tool, not gambling. They require research and judgment, just like trading stocks or futures. I'm asking the CFTC to craft rules that address specific risks without stifling the benefits these markets bring. Let's keep the U.S. competitive and ensure platforms like Kalshi can operate under fair, clear guidelines.
Thank you for considering my input. I urge you to support proportionate regulation of prediction markets and avoid over-restrictive measures.
Sincerely,
Kyle Johnson
