Comment Text:
Dear Chairman and Commissioners,
My name is Damian Serrano, a finance professional from California, and I'm writing to provide my input on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I actively trade on platforms like Kalshi, and I rely on prediction markets to make better-informed decisions in my day-to-day life, both personally and professionally. I strongly support the development of well-regulated prediction markets in the United States, and I urge the CFTC to adopt proportionate rules that foster innovation while addressing specific risks.
Prediction markets are invaluable to me because they consistently produce forecasts on elections and public events that are more accurate than polls or pundits. As someone in finance, I see the power of aggregated information firsthand. These markets don't just help me; they provide better data for public decision-making and price discovery, benefiting society as a whole. I also use them to hedge personal and business financial risks, like potential policy changes or economic shifts that could impact my investments or planning. This isn't gambling. It's a legitimate economic tool, grounded in research and judgment, much like trading stocks or commodities. Classifying event contracts as "gaming" ignores their real purpose, and I hope the CFTC recognizes this distinction when addressing questions like 15 through 22 on listed activities.
I'm also concerned about freedom to participate in legal, regulated markets. Platforms like Kalshi, under CFTC oversight, are far safer than unregulated offshore alternatives. Banning or over-restricting prediction markets, as discussed in questions 7 through 14 on public interest, won't stop trading; it will just push activity to less secure venues. The CFTC already has robust tools to tackle manipulation and insider trading, as noted in questions 1 through 6 on core principles. Instead of broad categorical bans, I believe targeted regulation is the answer. Let's address specific risks without stifling an entire industry. On a related note, I think the CFTC should consider allowing the public or market participants to submit tailored market rules for specific events. Each event is unique, and precedents in certain markets could guide better, more flexible regulation.
Finally, I want to stress the importance of U.S. competitiveness in financial innovation, a theme in questions 33 through 40 on classification and costs. We should be leading in this space, not ceding ground to other countries. Academic research supports the value of prediction markets for data transparency and forecasting, and I believe regulated markets enhance consumer protection by keeping activity onshore under your oversight.
I respectfully ask the CFTC to support proportionate regulation of prediction markets. Don't impose broad bans or overly restrictive rules that could undermine their benefits or push trading offshore. Thank you for considering my perspective.
Sincerely,
Damian Serrano
