Comment Text:
Dear Chairman and Commissioners,
My name is Nathaniel Taylor, and I'm just an everyday citizen from Colorado writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I care deeply about financial freedom, and that's why I believe prediction markets should be supported with fair, proportionate regulation. I've used these markets a few times myself, and I can see their value, not just for me but for society as a whole.
I think prediction markets are a powerful tool. They provide information that's hard to find anywhere else, often more accurate than polls or expert opinions. This kind of price discovery helps everyone, from regular folks like me to policymakers, make better decisions. Plus, these markets let individuals and businesses hedge against real risks. For example, a small business owner worried about election outcomes affecting taxes or regulations can use these markets to offset uncertainty. That's not gambling, it's smart planning. Classifying event contracts as "gaming" feels wrong to me because they serve legitimate economic purposes, much like trading stocks or commodities requires research and judgment about the real world.
Another reason I support regulated prediction markets is that the US should be leading the way in financial innovation. If we over-restrict or ban these markets, we're just handing the advantage to other countries. I'd rather see platforms like Kalshi, which operate under CFTC oversight, thrive here at home. Regulated markets are far safer than unregulated offshore ones. If we push this activity out of the US, people will still trade, just in less transparent and riskier places. That doesn't protect anyone.
I'm particularly interested in a couple of the questions you raised in the ANPR. On Question 7, about balancing innovation and consumer protection under the public interest, I think supporting prediction markets with clear rules strikes the right balance. It encourages new ideas while keeping traders safe. And on Question 15, about defining gaming versus legitimate markets, I strongly believe event contracts aren't gaming when they're used for hedging or price discovery. They have real economic value.
I know there are concerns about manipulation or insider trading, and those are valid worries. But the CFTC already has tools to address bad actors. Banning or overly restricting these markets punishes everyone for the actions of a few. Let's focus on enforcing existing laws instead of shutting down something so useful.
I urge you to support proportionate regulation of prediction markets. Don't ban them or impose restrictions that choke out their potential. They offer unique benefits for information, hedging, and keeping the US competitive, and with the right oversight, they can thrive safely.
Sincerely,
Nathaniel Taylor
