Comment Text:
Dear Chairman and Commissioners,
My name is Nate Fleischauer, and I'm an everyday citizen from Illinois who runs a small business on social media. I'm writing to comment on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) because platforms like Kalshi have become a vital tool for me. I actively trade on prediction markets, and I want to share why I strongly support well-regulated event contracts and why the CFTC should adopt proportionate rules rather than broad bans or over-restrictions.
For my business, Kalshi isn't just a hobby. It's a way to hedge real risks. Social media algorithms and ad revenues can shift based on political or economic events, like elections or policy changes. Trading on prediction markets lets me offset some of that uncertainty, whether it's an election outcome affecting content rules or a Federal Reserve decision impacting ad spend. This isn't gambling; it's a practical tool, much like how farmers hedge crop prices. I put in research and judgment, just as I would for any investment. Classifying event contracts as "gaming" ignores their legitimate economic purpose, and I urge the CFTC to recognize this in response to Questions 15-22 on listed activities.
I also value the information these markets provide. I've seen firsthand how prediction markets often beat polls or pundits in forecasting elections and public events. That data helps me make better business decisions, and it's a public good for everyone, not just traders. On Questions 7-14 about public interest, I believe the CFTC should weigh this price discovery benefit heavily. Plus, academic research backs this up; studies show these markets aggregate information efficiently. Informed trading, as raised in Questions 29-32, isn't a flaw. It improves accuracy and benefits all participants.
That said, I get the concerns about manipulation or insider trading. But the CFTC already has strong tools to tackle these issues in other derivatives markets. Use those existing powers rather than banning entire categories of contracts. And let's be honest, over-restricting these markets won't stop trading; it'll just push folks like me to unregulated offshore platforms, which are far less safe. On Questions 1-6 about core principles, I think regulated markets like Kalshi are the answer, not prohibition. The US should lead in financial innovation, not cede ground to other countries.
I'm just a regular guy trying to keep my business afloat. Prediction markets give me a fair shot to manage risks and access information big institutions already have. Please don't take that away with heavy-handed rules. I ask the CFTC to support proportionate, targeted regulation that addresses specific risks without shutting down these valuable tools.
Thank you for considering my perspective.
Sincerely,
Nate Fleischauer
