Comment Text:
Dear Chairman Selig and Commissioners,
My name is Wade Templeton. I am an individual retail participant from California, and I am writing in response to the Commodity Futures Trading Commissions Advance Notice of Proposed Rulemaking on Prediction Markets, 91 FR 12516, RIN 3038-AF65.
I support proportionate, well-regulated prediction markets in the United States. In my experience, platforms such as Kalshi provide value that goes beyond speculation. They help ordinary people evaluate real-world uncertainty, interpret public information, and manage risks tied to economic, political, and policy outcomes.
Prediction markets serve an important price-discovery function. Market prices can aggregate the views of many participants into a real-time estimate of expected outcomes. For a retail participant like me, that information can be more useful than relying only on news commentary, polling, or social media. I have used prediction markets to better understand events that could affect my personal finances, including inflation data, economic policy, and election-related outcomes. These markets help me think more clearly about risk.
Prediction markets can also provide a practical hedging function. Regular people face exposure to inflation, policy changes, employment conditions, tax changes, and other public events, but often have few direct tools to manage those risks. Event contracts can give individuals a limited, transparent way to offset uncertainty. This utility should be considered carefully when the Commission evaluates the public interest under the Commodity Exchange Act.
I urge the Commission not to treat event contracts as gaming merely because they have binary outcomes or because some participants may trade them for profit. Many legitimate financial instruments involve uncertain future outcomes. The better distinction should be based on the purpose, structure, underlying event, susceptibility to manipulation, and economic or public-interest value of the contract. Event contracts tied to economic indicators, elections, public policy, weather, and other measurable real-world events can provide price discovery and risk-management value. They should not be swept into a broad gaming classification.
I also believe that regulation is preferable to prohibition. CFTC-regulated prediction markets are safer than offshore or unregulated alternatives. If lawful domestic platforms are banned or restricted too heavily, demand will not disappear. Some users will move to venues with fewer protections, less transparency, weaker surveillance, and no meaningful U.S. regulatory oversight. A regulated domestic framework better protects consumers and market integrity.
The Commission should address legitimate risks through targeted safeguards rather than categorical bans. Manipulation, insider trading, abusive practices, and conflicts of interest are real concerns, especially for contracts tied to events influenced by small groups of people. But those risks can be addressed through market surveillance, position limits, disclosure rules, contract-specific review, strong settlement procedures, and enforcement against bad actors. The answer should be stronger oversight, not eliminating useful markets for everyone.
For retail users, I also support clear risk disclosures, fair access rules, transparent fees, strong customer-fund protections, and limits that prevent excessive risk-taking. Fully collateralized contracts are easier for ordinary users to understand than leveraged products. If the Commission considers margin for prediction markets in the future, retail margin should be treated cautiously and separately from fully collateralized trading.
In response to the ANPRMs questions on public interest, gaming, manipulation, and cost-benefit considerations, I respectfully urge the Commission to:
preserve lawful access to CFTC-regulated prediction markets for retail participants;
avoid classifying event contracts as gaming solely because they are binary or event-based;
evaluate contracts based on their specific economic, informational, hedging, and public-interest value;
use targeted tools such as surveillance, disclosures, position limits, and enforcement instead of broad prohibitions;
recognize that overly restrictive rules may push users toward unregulated offshore markets; and
promote responsible innovation and fair competition among regulated U.S. markets.
Prediction markets have helped me become a more informed participant in economic and civic life. They give everyday people access to information and risk-management tools that otherwise may be unavailable. I ask the Commission to adopt a balanced framework that protects the public while allowing well-regulated prediction markets to continue operating and improving.
Thank you for considering my comment.
Sincerely,
Wade Templeton
