Comment Text:
Dear Chairman and Commissioners,
My name is Mohammed Kabir, and I'm a student from Connecticut writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've used prediction markets a few times myself, and I strongly support their development under fair, proportionate regulation by the CFTC. I believe these markets offer unique value to society, and I want to explain why I think they deserve a thoughtful regulatory framework instead of overly restrictive rules or bans.
As a student, Ive seen firsthand how prediction markets provide information thats often more accurate than polls or pundits. Whether its forecasting election outcomes or other public events, the aggregated wisdom of these markets cuts through noise and bias in a way traditional sources often can't. This isn't just helpful for traders like me; its valuable for the public, media, and even policymakers who need reliable data to make informed decisions. Beyond that, these platforms let regular people like me participate in a space that would otherwise be dominated by big institutions. That access feels fair, and it makes the markets predictions stronger by including diverse perspectives.
I also see real economic purpose in prediction markets, especially for hedging risks. For instance, Ive thought about how small business owners or even students planning their futures could use these markets to protect against uncertainties like policy changes or economic shifts. This isnt gambling. It takes research and judgment, much like trading stocks or commodities. Classifying event contracts as "gaming" ignores their legitimate role in price discovery and risk management. On this point, Id like to address Question 15 from the ANPR about defining gaming versus legitimate markets. I urge the CFTC to recognize that event contracts serve economic purposes distinct from gambling and should be regulated as such.
Im not blind to concerns like insider trading or manipulation, but I dont think banning or over-restricting these markets is the answer. The CFTC already has powerful tools to tackle bad actors, as seen in other derivatives markets. Use those tools rather than punishing everyone with broad categorical bans. And lets be honest, if the U.S. clamps down too hard, people will just turn to unregulated offshore platforms, which are far riskier. Regulated markets like Kalshi are a safer option, and Id rather see the U.S. lead in financial innovation than cede that space to other countries. This ties into Questions 7 and 8 on balancing innovation with consumer protection. I believe proportionate, targeted rules can achieve both.
Finally, as someone in academia, I value the data transparency and research potential of prediction markets. Theyre a goldmine for studying how information aggregates. Informed trading, far from being a problem, actually sharpens price discovery, benefiting everyone. I hope the CFTC considers this in relation to Questions 29 and 30 on inside information.
I ask that you support well-regulated prediction markets with rules that address specific risks without stifling their potential. Thank you for considering my perspective.
Sincerely,
Mohammed Kabir
