Comment Text:
Dear Chairman and Commissioners,
My name is Vincent Donato, and I'm a trader and investor based in New York. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to support 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 people like me, to businesses, and to society as a whole, and I urge the CFTC to regulate them proportionately rather than impose bans or overly restrictive rules.
As a trader, I rely on accurate information to make decisions. Prediction markets consistently outperform polls and pundits when it comes to forecasting elections and other public events. I've seen this firsthand on platforms like Kalshi, where the aggregated wisdom of many traders often paints a clearer picture than any single expert. This isn't just useful for me; it helps everyone, from policymakers to regular citizens, make better-informed decisions. Price discovery in these markets is a public good, and shutting them down would mean losing that edge.
I also value the freedom to participate in legal, regulated markets. Platforms like Kalshi, under CFTC oversight, are far safer than unregulated offshore alternatives. If the U.S. over-restricts or bans prediction markets, activity will just move to less transparent venues where theres no protection for traders. Thats a step backward. Plus, these markets let me and others hedge real risks. For instance, Ive used event contracts to offset uncertainties around economic policies that could impact my investments. This isnt gambling; its a legitimate economic tool, no different from hedging with futures or options. Classifying event contracts as "gaming" ignores their purpose, and I hope the CFTC avoids that mistake.
Id like to address a couple of specific questions from the ANPR. On Question 7, regarding public interest, I believe prediction markets serve the public by improving information and offering risk management tools. On Question 29, about inside information, I think informed trading actually improves price discovery and benefits all participants, as long as existing laws against insider trading are enforced. The CFTC already has strong tools to tackle manipulation and insider trading in other derivatives markets. Use those tools here instead of broad bans. Targeted rules make more sense than categorical prohibitions.
Finally, the U.S. should be leading in financial innovation, not ceding ground to other countries. Over-regulation risks pushing innovation offshore, and we can't afford that. I'm all for safeguards, but they need to be reasonable and focused on specific risks, not blanket restrictions.
I respectfully ask the CFTC to support proportionate regulation of prediction markets. Keep them accessible, safe, and legal for traders like me while maintaining the tools to prevent abuse. Thank you for considering my input.
Sincerely,
Vincent Donato
