Comment Text:
Dear Chairman and Commissioners,
My name is Albion Bacaj, and I'm a student based in New York. I'm writing to provide my input on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. As someone who actively trades on platforms like Kalshi, I strongly support the development of well-regulated prediction markets and believe they serve an important purpose for individuals, businesses, and society as a whole.
I've seen firsthand how prediction markets offer insights you can't get from polls or pundits. For instance, during the last election cycle, I followed market prices on Kalshi for various outcomes, and they were consistently more accurate than most media forecasts. This kind of information isn't just helpful for traders like me; it benefits everyone by providing clearer signals about public events. As a student, I also value the academic side of this. Research shows these markets aggregate information efficiently, and I think the data they produce could be a goldmine for studying decision-making and forecasting.
I also use prediction markets to hedge personal financial risks. With the cost of living in New York always a concern, I've placed small trades to offset potential impacts from economic events like inflation reports or Fed decisions that could affect my budget. This isn't gambling. It takes research and judgment, much like investing in stocks. Classifying event contracts as "gaming" (as raised in Questions 15-22) ignores their real economic purpose, whether it's price discovery or risk management. I urge the CFTC to recognize this distinction.
On the flip side, I understand concerns about manipulation or insider trading (like those in Questions 29-32). But the CFTC already has strong tools to address these issues in other derivatives markets, and they can be applied here too. Banning or over-restricting prediction markets won't solve bad behavior; it will just push activity to unregulated offshore platforms where there's no oversight at all. I'd much rather trade on a regulated U.S. platform like Kalshi, where consumer protections are in place, than take my chances with sketchy foreign sites.
I also believe the U.S. should be a leader in financial innovation. If we over-regulate or ban these markets, we're handing the advantage to other countries. Regarding Questions 7-14 on balancing innovation and public interest, I think proportionate, targeted rules are the way to go. Address specific risks without broad categorical bans that punish everyone.
Prediction markets give people like me a chance to participate in legal, regulated spaces and make better-informed decisions. They help with forecasting, hedging, and even civic engagement. Please support their growth with sensible regulation, not restrictions that drive activity underground. I'm happy to provide more details on my experiences if it helps.
Thank you for considering my comments.
Sincerely,
Albion Bacaj
