Comment Text:
Dear Chairman and Commissioners,
My name is Jordan Moghanaki, and I'm a student from Minnesota. I've used prediction markets a few times, mainly out of curiosity and to better understand how they aggregate information about real-world events. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, published in the Federal Register as 91 FR 12516. I support the idea of well-regulated prediction markets, but I have serious concerns about the risks they pose without proper oversight. I believe the CFTC should focus on targeted regulation that protects consumers.
As a student, I value the freedom to participate in legal, regulated markets like these. Prediction markets can offer unique insights that you can't find in polls or news commentary. I've seen firsthand how platforms like Kalshi can turn complex events into data points that help people make sense of uncertainty. But I'm also worried about how these markets can be misused. Without strong rules, they risk becoming tools that extract money from everyday folks, especially working-class Americans, and funnel it to predatory investors. The slot-machine style design of some prediction market apps doesn't help, as it detracts from any academic or informational value they might have. It feels more like gambling than investing sometimes.
Im particularly concerned about the ability of these platforms to sidestep state-level gambling prohibitions and the lack of clear rules around insider information. This could be exploited in ways that harm regular users.
Looking at some of the questions in the ANPR, I think Question 29 about insider information is critical. There needs to be strict enforcement of existing laws that prevent federal employees or others from trading on nonpublic info. And on Question 7, regarding public interest, I believe the CFTC should balance innovation with consumer protection by focusing on transparency and fairness in how these markets operate. If a few bad actors can easily corrupt the entire system, then the system is unfair.
Without regulation, prediction markets are one of the most dangerous financial innovations out there. I ask the CFTC to support rules that protect users before allowing profit-seeking ventures.
Thank you for considering my input.
Sincerely,
Jordan Moghanaki
