Comment Text:
Dear Chairman and Commissioners,
My name is Kathleen Simpson, and I'm a trader and investor from Colorado. I'm writing to comment 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 in the United States, and I want to share why I believe the CFTC should adopt proportionate rules rather than overly restrictive bans.
I've been trading on prediction markets for a while now, focusing mostly on elections and major public events. What strikes me most is how these markets consistently outperform polls and pundits when it comes to forecasting outcomes. I've seen it firsthand. During the last election cycle, while news outlets and surveys were all over the place, the prices on prediction markets gave me a clearer picture of what was likely to happen. That kind of information isn't just useful to me as a trader; it's valuable to anyone trying to make sense of the world, from journalists to policymakers. It's a public good, honestly.
I'm worried, though, that banning or over-restricting these markets would push activity offshore to unregulated platforms. I've looked at some of those foreign sites, and they don't have the oversight or protections that a CFTC-regulated market like Kalshi offers. If the U.S. cracks down too hard, traders like me will be forced into riskier environments, and the country will lose out on the benefits of having these markets operate under proper rules. The U.S. should be leading the way in financial innovation, not handing that advantage to other countries. We have the chance to set the global standard here, and I hope we take it.
I understand there are concerns about manipulation or insider trading. Those are real issues, no question. But I believe the CFTC already has tools to address them, and the answer isn't to shut down entire markets. Targeted, proportionate regulation makes more sense than broad categorical bans. For instance, in response to Question 7 from the ANPR about balancing innovation and consumer protection, I'd argue that specific rules to prevent abuse, paired with strong enforcement, can protect users while still allowing prediction markets to grow. And on Question 15, regarding what activities should be permitted, I think the focus should be on allowing contracts that serve a clear forecasting or hedging purpose, not just blanket prohibitions.
Prediction markets aren't perfect, but they provide unique value that we shouldn't throw away. I'm asking the CFTC to support their growth with fair, balanced regulation that tackles specific risks without punishing everyone. Let's keep these markets safe, accessible, and American-led.
Thank you for considering my input.
Sincerely,
Kathleen Simpson
