Comment Text:
Dear Chairman and Commissioners,
My name is Alex John, and I'm a business owner from New York. I run a small company here, and Ive been actively trading on prediction markets like Kalshi for a couple of years now. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my strong support for well-regulated prediction markets. I believe they provide unique value to people like me, and to society as a whole, and I urge the CFTC to adopt proportionate regulations rather than restrictive bans.
As a business owner, I rely on accurate information to make decisions, especially when it comes to political events like elections or policy changes that could impact my taxes or regulations affecting my industry. I've found that prediction markets consistently offer forecasts that beat polls or pundits. That kind of insight isnt just helpful for traders; its valuable for anyone trying to plan ahead. Beyond forecasting, I use these markets to hedge real financial risks. For instance, Ive placed trades on economic indicators like CPI data to offset potential impacts on my supply costs. This isnt gambling. Its a practical tool, much like any other investment strategy I might use to protect my business.
I also value the freedom to participate in legal, regulated markets like Kalshi. Platforms under CFTC oversight are far safer than unregulated offshore alternatives. If the CFTC over-restricts or bans these markets, people wont stop trading; theyll just move to less transparent, riskier venues. Thats bad for consumer protection and bad for US competitiveness. We should be leading in financial innovation, not ceding ground to other countries. Regulated markets also ensure better data transparency, and Ive read academic studies showing how prediction markets improve price discovery. Informed trading, even by those with strong insights, benefits everyone by making prices more accurate.
Im aware of concerns like manipulation or insider trading, and I take them seriously. But the CFTC already has robust tools to address these issues in other derivatives markets. Those same tools can work here. Banning or over-restricting event contracts to stop a few bad actors punishes the majority who use these markets responsibly. On the topic of classification, I strongly believe event contracts arent gaming. They serve real economic purposes like hedging and information aggregation, as Ive experienced firsthand.
Id like to address a few specific questions from the ANPR. Regarding Questions 7-14 on public interest, I think the CFTC should prioritize balancing innovation with consumer protection by supporting regulated platforms over offshore alternatives. For Questions 15-22 on listed activities, event contracts tied to public events should not be treated as gaming but as legitimate financial instruments. And on Questions 29-32 about inside information, I believe informed trading enhances price discovery and shouldnt be stifled, provided existing laws against insider trading are enforced.
In closing, I ask the CFTC to support proportionate, targeted regulation of prediction markets. Dont ban or overly restrict them. Allow individuals and businesses like mine to benefit from these tools while ensuring safety through oversight. Thank you for considering my input.
Sincerely,
Alex John
