Comment Text:
Dear Chairman and Commissioners,
My name is Alex Warner, and I'm a trader and investor based in Texas. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I strongly support the development of well-regulated prediction markets in the United States, and I want to share why I think proportionate regulation, not bans or heavy restrictions, is the right path forward.
As someone who trades regularly, I've seen firsthand how prediction markets provide unique information you can't find anywhere else. The prices on these platforms often predict outcomes more accurately than polls or pundits, which helps me make better decisions, not just in trading but in understanding the world around me. This kind of price discovery isn't just useful for traders like me; it's valuable for the public, businesses, and even policymakers who need reliable signals about future events. I believe the U.S. should be a leader in financial innovation, fostering tools like these instead of falling behind other countries.
I also rely on prediction markets to hedge real risks. For instance, I've used Kalshi to manage uncertainty around election outcomes that could impact my investments or tax planning. This isn't gambling; it's a practical way to protect myself financially, just like hedging with futures or options in other markets. Individuals and businesses need these tools to navigate economic and political uncertainty, and restricting them would leave us exposed.
That said, I understand concerns about consumer protection, and I agree that regulation is necessary. But here's the thing: regulated platforms like Kalshi, under CFTC oversight, are far safer than the alternative. If you ban or over-restrict these markets, people like me won't just stop trading. We'll get pushed to unregulated offshore platforms with no protections, no transparency, and no accountability. I've seen those sites out there, and they're a mess. Keeping prediction markets legal and regulated in the U.S. ensures that trading happens in a controlled environment where the CFTC can step in if something goes wrong.
I'd like to address a couple of specific questions from the ANPR. On Question 7, regarding balancing innovation and consumer protection, I think the focus should be on strong oversight of domestic markets rather than broad prohibitions. And on Question 29, about inside information, I believe the CFTC's existing tools to combat manipulation and insider trading can be applied here without shutting down entire markets. Punishing everyone for the actions of a few bad actors doesn't make sense.
In closing, I urge the CFTC to support proportionate regulation of prediction markets. Don't ban or overly restrict them. Keep platforms like Kalshi accessible under clear, fair rules so we can trade safely and the U.S. can maintain its edge in financial innovation. Thank you for considering my perspective.
Sincerely,
Alex Warner
