Comment Text:
Dear Chairman and Commissioners,
My name is Sebastian Martinez, and I'm a trader and investor from Idaho. I've been actively trading on prediction markets like Kalshi for a while now, and I wanted to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I strongly support the development of well-regulated prediction markets and believe they provide real value to people like me and to society as a whole.
As someone who trades regularly, I can tell you that prediction markets are not gambling. They serve a genuine economic purpose. When I trade on Kalshi, I'm not just throwing money at a game of chance. I do research, follow news, and analyze trends to make informed decisions, much like I do with stocks or other investments. These markets let me hedge against uncertainties that affect my finances, like election outcomes or economic data releases. More importantly, the prices on these platforms often give insights you can't find in polls or pundit opinions. I've seen firsthand how prediction markets consistently outperform traditional forecasts for elections and public events. That kind of accuracy isn't just helpful for traders; it benefits everyone who wants clearer information about the future.
I also believe that allowing informed trading in these markets improves price discovery for all participants. When people with real knowledge contribute to the market, the resulting prices reflect a better picture of what's likely to happen. Banning or over-restricting these markets won't stop trading; it'll just push activity to unregulated offshore platforms where there's no oversight. I'd much rather trade on a regulated platform like Kalshi, where there are protections in place, than take my chances with some shady overseas site. Regulation keeps things safe and fair, and I think the CFTC should focus on that instead of broad restrictions.
Regarding some of the specific questions in the ANPR, I want to address Question 7 under Public Interest. I believe prediction markets do serve the public good by providing accurate forecasting and democratizing access to information. On Question 15 under Listed Activities, I urge you not to classify event contracts as gaming. Theyre a legitimate financial tool, not a casino game. And for Question 29 under Inside Information, I think informed traders help the market reflect true probabilities, as long as existing laws against insider trading are enforced.
I'm asking the CFTC to support proportionate regulation of prediction markets. Don't ban or overly restrict them. Focus on targeted rules to address specific risks while allowing platforms like Kalshi to operate and grow under your oversight. These markets are a valuable tool for traders like me and for the broader public, and I believe the US can lead the way with smart, balanced regulation.
Thank you for considering my input.
Sincerely,
Sebastian Martinez
