Comment Text:
Dear Chairman and Commissioners,
My name is Owen Hugel, and I'm a student from Maryland. I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I actively trade on platforms like Kalshi, and I strongly support the development of well-regulated prediction markets in the United States. I believe they provide unique value, both to me personally and to society at large, and I urge the CFTC to adopt a balanced approach to regulation that allows these markets to thrive.
As a student, I've found prediction markets to be an incredible tool for understanding real-world events. Trading on Kalshi has taught me to research, analyze data, and think critically about everything from election outcomes to economic indicators. The prices on these platforms often reflect information that's more accurate than what I see in polls or news commentary. This isn't just useful for traders like me; it helps everyone by providing better data for public decision-making. I think the CFTC should recognize this value, especially when considering questions 7 and 8 from the ANPR about the public interest and price discovery benefits of event contracts.
I'm also concerned about maintaining freedom to participate in legal, regulated markets. Prediction markets aren't gambling; they require skill and judgment, just like trading stocks or commodities. Banning or overly restricting them would push activity to unregulated offshore platforms, which are far less safe and lack oversight. I've traded on Kalshi because it's regulated by the CFTC, and I trust that more than any offshore site. Addressing question 23 on procedural aspects, I believe the CFTC should focus on proportionate regulation that targets specific risks, like manipulation, rather than broad categorical bans that punish legitimate participants.
Another point I want to make is about informed trading. I understand the concerns raised in questions 29 and 30 regarding insider information, but I believe informed traders actually improve price discovery. Their participation makes the market's predictions more accurate, which benefits everyone, not just those trading. Instead of banning entire markets over fears of bad actors, the CFTC should use its existing tools to enforce rules against insider trading and manipulation. These laws are already in place; they just need to be applied.
Finally, I worry about US competitiveness. If we over-regulate prediction markets, we risk ceding financial innovation to other countries. As a young person studying these topics, I want the US to lead in creating safe, cutting-edge markets. I hope the CFTC considers this when weighing the costs and benefits in questions 33 to 40.
I urge you to support proportionate regulation of prediction markets that allows platforms like Kalshi to operate while addressing specific risks with targeted rules. Let's not ban or over-restrict a valuable tool that benefits so many.
Sincerely,
Owen Hugel
