Comment Text:
Dear Chairman and Commissioners,
My name is Lee Hamilton, and I'm a trader and investor from Connecticut. I've been actively trading on prediction markets like Kalshi for a while now, and Im 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 theyre valuable, both for me personally and for society as a whole.
As a trader, Ive seen firsthand how prediction markets provide information you just cant get anywhere else. Their forecasts on elections and other public events consistently beat polls and pundits. Ive used these insights to make better decisions, not just in trading but in understanding the world around me. This isnt gambling, despite what some might say. Trading on these markets takes research and judgment, much like trading stocks or commodities. Event contracts serve real economic purposes, like price discovery and hedging risks. For instance, Ive used them to hedge personal financial risks tied to policy changes or economic events, like potential shifts in interest rates that could impact my investments. Classifying these as "gaming" undercuts their legitimate value.
I also believe regulated markets like Kalshi are far safer than the unregulated offshore platforms out there. If the CFTC over-restricts or bans prediction markets, it wont stop people from participating. Itll just push activity to less safe, less transparent venues outside U.S. jurisdiction. Thats a loss for consumer protection, not a win. The U.S. should be leading in financial innovation, not ceding ground to other countries. Regulated markets also incentivize informed trading, which improves price discovery and benefits everyone, not just traders like me.
Addressing some of your specific questions, like those in Topic B on public interest (Questions 7-14), I think prediction markets balance innovation and consumer protection when properly regulated. They provide unique tools for risk management and better information for public decision-making. On Topic E, regarding inside information (Questions 29-32), Id argue that informed traders often improve market accuracy, and the CFTC already has robust tools to prevent manipulation and insider trading in other derivatives markets. These can be adapted here without broad bans. As for Topic C on listed activities (Questions 15-22), event contracts shouldnt be lumped in with gaming. Theyre distinct and serve real economic needs.
Im not blind to the risks. Manipulation and insider trading are real concerns, but banning or overly restricting these markets isnt the answer. It punishes the majority who trade in good faith. Instead, I urge the CFTC to focus on proportionate, targeted regulation that addresses specific risks without stifling innovation.
Thank you for considering my input. I ask that you support the growth of prediction markets with fair, balanced rules that keep them safe and accessible to everyday traders like me.
Sincerely,
Lee Hamilton
