Comment Text:
Dear Chairman and Commissioners,
My name is Dakota Clark, and I'm a student from Minnesota. I'm writing in response to 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. I believe they offer unique value to society and to individuals like me, and I want to share why I think the CFTC should encourage their growth with balanced, proportionate rules rather than heavy-handed restrictions.
As a student, I find prediction markets incredibly useful for understanding the world around me. I've seen firsthand how their forecasts on elections and public events often beat polls and pundits. That kind of accurate, real-time information isn't just helpful for traders; it benefits everyone, from policymakers to everyday citizens trying to make sense of complex issues. I also value the freedom to participate in these legal, regulated markets. Banning or over-restricting them wouldn't protect people like me; it would push activity to unregulated offshore platforms where there are no safeguards. I'd much rather trade on a CFTC-regulated exchange like Kalshi, knowing there's oversight, than take my chances elsewhere.
I also want to stress that event contracts aren't gambling. When I trade on Kalshi, I'm using research and judgment to make informed decisions, just like someone trading stocks or commodities. These markets serve real purposes, like helping people and businesses hedge against risks. For example, a small business owner could use prediction markets to offset uncertainty around policy changes or economic shifts. Classifying this as gaming feels unfair and misses the economic value. Plus, informed trading actually improves price discovery, making the data more reliable for everyone.
I'm also concerned about U.S. competitiveness. If we over-regulate prediction markets, we risk ceding leadership in financial innovation to other countries. We should be at the forefront, setting smart standards. I appreciate that the CFTC is asking for input through this ANPR, and I'd like to address a few specific questions. On Question 7, regarding public interest, I believe prediction markets serve the public by providing better information for decision-making. On Question 15, about defining gaming, I urge you not to lump event contracts under that label, as they have legitimate uses. And on Question 29, about inside information, I think the CFTC's existing tools to combat manipulation and insider trading are sufficient; the focus should be on enforcement, not bans.
I understand there are concerns about manipulation or consumer harm, but shutting down or overly restricting these markets isn't the answer. The CFTC already has strong authority to tackle bad actors. Let's not punish everyone for the actions of a few. I hope you'll support proportionate regulation that addresses specific risks without stifling innovation or pushing activity offshore.
Thank you for considering my perspective.
Sincerely,
Dakota Clark
