Comment Text:
Dear Chairman and Commissioners,
My name is Rogelio Favela Jr., and I'm a trader and investor from Texas. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to express my strong support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to individuals like me, to businesses, and to society as a whole, and I urge the CFTC to craft rules that support their growth while addressing legitimate risks.
As a trader, Ive seen firsthand how prediction markets offer information you cant get anywhere else. Whether its forecasting election outcomes or other public events, the prices on these platforms often cut through the noise of polls and pundits. Ive used this data to make better decisions, not just for trading but for understanding the world around me. Academic research backs this up, showing how these markets aggregate information efficiently, often outperforming traditional forecasting methods. I think this benefits everyone, from regular folks to policymakers who need clear signals on public sentiment.
I also want to stress that event contracts arent gambling. Trading on Kalshi requires research and judgment, just like trading stocks or commodities. These contracts serve real economic purposes, like helping individuals and businesses hedge against risks. For example, Ive used prediction markets to offset uncertainties tied to policy changes that could impact my investments. Classifying this as "gaming" would be a mistake, and I hope the CFTC avoids that framing when addressing questions like 15 through 22 in the ANPR about listed activities.
On the flip side, I get the concerns about manipulation or insider trading. But the CFTC already has strong tools to tackle those issues, just as they do for other derivatives markets. Banning or over-restricting prediction markets isnt the answer. It would just push activity to unregulated offshore platforms, which are far less safe than a regulated market like Kalshi. Id rather see the CFTC focus on enforcing existing laws and adapting current safeguards, as discussed in questions 1 through 6 on core principles and regulations, than impose heavy-handed restrictions that hurt honest traders like me.
I also think the public interest angle, covered in questions 7 through 14, weighs heavily in favor of these markets. They democratize access to information and price discovery, letting everyday people participate alongside big institutions. Shutting that down would keep valuable insights locked away with the few, not the many.
Im asking the CFTC to support proportionate regulation that allows prediction markets to thrive while targeting specific risks with focused rules. Dont ban or over-restrict these platforms. Theyre too valuable for accurate forecasting and risk management, and regulated markets are the safest way to keep them accessible. Thank you for considering my input.
Sincerely,
Rogelio Favela Jr.
