Comment Text:
Dear Chairman and Commissioners,
My name is Edward McBroom, and I'm a student from Michigan. I'm writing to share my thoughts 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 I want to explain why I believe they are valuable and should not face overly restrictive rules.
I've been trading on prediction markets for a while now, and I find them to be a unique source of information that I can't get from news or polls. Whether it's an election outcome or an economic indicator, the prices on these markets often reflect a clearer picture of what's likely to happen. This isn't just helpful for me as a trader; it's useful for anyone trying to understand the world, including students like me who are learning about politics and economics. Beyond that, prediction markets feel like a way for regular people to have a voice. They let someone like me, who isn't a Wall Street insider, participate in a financial system that usually feels out of reach. I think that's a good thing, not something to be restricted.
One concern I have is the idea of classifying event contracts as "gaming." I don't see it that way at all. When I trade on Kalshi, I'm not rolling dice or betting on a sports game. I'm doing research, reading up on candidates or policies, and making informed decisions based on real-world events. This feels a lot closer to investing in stocks than to gambling. These contracts also have real economic purposes, like hedging against uncertainties that affect my life, such as policy changes that could impact student loans or job prospects after graduation. I believe the CFTC should recognize this distinction, as discussed in Questions 15 to 22 about listed activities and defining gaming. Event contracts aren't just games; they serve a practical role for people like me.
I also want to address a concern I know comes up, like insider trading or manipulation. I get why that's a worry, but I don't think the solution is to ban or over-restrict these markets. There are already laws against insider trading and manipulation, and the CFTC has the power to enforce them. Shutting down prediction markets to stop a few bad actors feels like punishing everyone else who uses them responsibly. I'd urge you to focus on enforcing existing rules rather than creating broad prohibitions, as touched on in Questions 29 to 32 about inside information.
In closing, I ask the CFTC to support proportionate regulation of prediction markets. Don't ban or overly restrict them. They provide real value to people like me, and with the right oversight, they can continue to do so safely and fairly. Thank you for considering my perspective.
Sincerely,
Edward McBroom
