Comment Text:
Dear Chairman and Commissioners,
My name is Stephanie Koh, and Im a finance professional based in New York. Ive been actively trading on prediction markets like Kalshi 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 individuals like me, as well as to society at large, and I urge the CFTC to regulate them proportionately rather than imposing bans or overly restrictive rules.
As someone who works in finance, I rely on accurate data and forecasts to make informed decisions. Prediction markets have consistently outperformed polls and pundits when it comes to forecasting events like elections or major economic indicators. Ive seen firsthand how the aggregated wisdom of these markets provides insights I cant get elsewhere. For example, during the last election cycle, Kalshis market prices gave me a clearer picture of potential outcomes than any news outlet. This isnt just useful for traders; its valuable information for everyone, from policymakers to everyday citizens.
Beyond forecasting, I also use prediction markets to hedge personal and professional financial risks. Whether its an election outcome that could impact tax policies affecting my work or a Federal Reserve decision tied to interest rates, these markets let me manage uncertainty in a way traditional investments cant always match. This isnt gambling, despite what some might claim. Trading on event contracts requires research, analysis, and judgment, much like trading stocks or commodities. They serve a real economic purpose, and I believe the CFTC should recognize that distinction when addressing concerns in Questions 15-22 about defining gaming versus legitimate markets.
I also want to stress that regulated platforms like Kalshi are far safer than unregulated offshore alternatives. If the CFTC over-restricts or bans these markets, activity wont disappear; itll just move to less transparent, riskier venues. Id much rather trade on a CFTC-registered platform with oversight than be pushed to an offshore site with no protections. This ties directly to Questions 7-14 on balancing innovation and consumer protection. Regulation, not prohibition, is the answer.
Finally, Im confident the CFTC already has the tools to handle risks like manipulation or insider trading, as discussed in Questions 1-6 and 29-32. These issues are already illegal, and your existing authority over derivatives markets can be adapted to event contracts. Banning or overly restricting prediction markets to address a few bad actors would punish law-abiding participants like me and stifle innovation.
I appreciate the CFTCs thoughtful approach in seeking public input. I urge you to support proportionate regulation that allows prediction markets to thrive while addressing specific risks with targeted rules. Lets keep these markets accessible, safe, and regulated here in the U.S.
Sincerely,
Stephanie Koh
