Comment Text:
Dear Chairman and Commissioners,
My name is Gerardo Madrigal, and I'm just an everyday citizen from Oregon writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I'm new to prediction markets, but I strongly support their existence under fair and reasonable regulation. I believe these markets offer unique value and that the CFTC should focus on regulating them properly rather than restricting access or banning certain types of contracts.
As someone who values the freedom to participate in legal, regulated financial markets, I think prediction markets like Kalshi, which operate under CFTC oversight, are a much safer option for people like me compared to unregulated offshore platforms. If the U.S. over-restricts or bans these markets, it won't stop the activity. It will just push people to less safe, less transparent venues outside the CFTC's reach. That seems like a step backward. Instead, the U.S. should lead in financial innovation. We shouldn't cede this space to other countries that are more willing to embrace new ideas.
I also don't see event contracts as gambling. They serve real economic purposes, like helping people hedge against personal or business risks. For example, I can imagine using a prediction market to protect against financial uncertainty tied to political events or economic policy changes that might affect my budget or small side hustle. This isn't a game. It's a practical tool. And when informed traders participate, their knowledge improves price discovery, which benefits everyone, not just those trading.
Regarding some of the specific questions in the ANPR, I want to address Question 7 on balancing innovation and consumer protection, and Question 15 on defining gaming versus legitimate markets. For Question 7, I believe the CFTC can protect consumers through targeted rules that address specific risks like manipulation, without stifling innovation with broad bans. For Question 15, I urge you to recognize that event contracts aren't gambling when they provide hedging or informational value, which they often do. Proportionate regulation, not categorical restrictions, is the right path.
I'm not an expert, but I do worry that over-restricting these markets would limit opportunities for regular folks like me while failing to address the real issues. The CFTC already has tools to tackle bad actors. Use those instead of broad prohibitions that hurt everyone. I respectfully ask that you support well-regulated prediction markets and allow them to grow under fair, targeted rules that keep innovation alive in the U.S.
Thank you for considering my input.
Sincerely,
Gerardo Madrigal
