Comment Text:
Dear Chairman and Commissioners,
My name is Karson Schneider, and I'm a trader and investor based in Colorado. I've been following the growth of prediction markets with interest and have used them a few times myself. 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 real value to individuals like me, businesses, and society as a whole, and I urge the CFTC to craft rules that encourage innovation while addressing legitimate risks.
As someone who trades and invests, I see prediction markets as a unique tool for hedging personal and business financial risks. For instance, I've used these markets to offset uncertainties tied to election outcomes that could impact tax policies affecting my investments. This isn't gambling; it's a practical way to manage real-world exposure, much like using futures to hedge commodity prices. I also value the freedom to participate in legal, regulated markets. Platforms like Kalshi, operating under CFTC oversight, are far safer than unregulated offshore alternatives. If we over-restrict or ban these markets, people will just turn to less secure venues, and that helps no one.
Beyond my personal use, I think prediction markets provide accurate forecasting for elections and public events, often outperforming polls or pundits. This isn't just useful for traders; it benefits everyone by making better information available. I also believe informed trading improves price discovery, which helps all market participants. Addressing Questions 29-32 from your ANPR, Id argue that while insider trading is a concern, banning markets isn't the answer. The CFTC already has strong tools to prevent manipulation and insider trading in other derivatives markets. Use those existing powers rather than punishing everyone with broad restrictions.
Finally, I'm worried about US competitiveness in financial innovation. We should be leading the way on new financial tools, not ceding ground to other countries. If we stifle prediction markets here, the innovation will just happen elsewhere, and we'll miss out. In response to Questions 7-14 on public interest, I believe the balance tips toward supporting these markets for their forecasting and hedging benefits, as long as consumer protections are in place through smart regulation.
I ask the CFTC to support proportionate rules that allow prediction markets to thrive while targeting specific risks like manipulation. Don't ban or over-restrict them. Let's keep this valuable tool accessible and safe under your oversight.
Thank you for considering my input.
Sincerely,
Karson Schneider
