Comment Text:
Dear Chairman and Commissioners,
My name is Nick Waxley, and I'm a trader and investor from Louisiana. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I strongly support well-regulated prediction markets and believe they provide real value to people like me, as well as to society at large.
As a trader, Ive seen firsthand how prediction markets offer information you cant get anywhere else. Their forecasts on elections and public events are often more accurate than polls or pundits. Ive used these insights to make better decisions, not just in trading but in understanding the world around me. This isnt just about personal gain. When prices reflect real probabilities, everyone benefits, from regular folks to policymakers who need reliable data. I also use these markets to hedge personal financial risks, like potential policy changes that could impact my investments or tax situation. Its a practical tool, not a game.
Im all for consumer protection, but banning or over-restricting these markets isnt the answer. Regulated platforms like Kalshi are far safer than unregulated offshore alternatives. If the CFTC clamps down too hard, activity will just move to less transparent venues, which helps no one. The U.S. should be leading in financial innovation, not handing that edge to other countries. Plus, the CFTC already has strong tools to tackle manipulation and insider trading in other derivatives markets. Those same tools can work here without broad categorical bans. Proportionate regulation, targeting specific risks, makes more sense.
On the topic of classification, I dont see event contracts as gambling. They serve real economic purposes like hedging and price discovery, much like trading stocks or commodities. Calling this gaming feels like a stretch. And when it comes to informed trading, I believe it actually improves price accuracy, which helps everyone participating. Im particularly drawn to the academic research on this, like studies showing how prediction markets aggregate information efficiently. That data transparency is a public good.
Id like to address a few specific questions from the ANPR. On Questions 7-14 under Public Interest, I believe the CFTC should prioritize balancing innovation with protection by supporting regulated markets over offshore alternatives. For Questions 15-22 on Listed Activities, event contracts shouldnt be lumped in with gaming; theyre legitimate tools for risk management. And regarding Questions 29-32 on Inside Information, informed trading can enhance price discovery, as long as existing laws against insider trading are enforced.
I urge the CFTC to support proportionate regulation of prediction markets. Dont ban or overly restrict them. Lets keep these markets accessible, safe, and innovative right here in the U.S. Thank you for considering my perspective.
Sincerely,
Nick Waxley
