Comment Text:
Dear Chairman and Commissioners,
My name is Aaron Solomon, and I'm an everyday citizen from New Jersey who actively trades on prediction markets like Kalshi. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I strongly support the development of well-regulated prediction markets and want to share my perspective on why they matter to me and to the broader public.
I've found prediction markets to be incredibly valuable for getting information that's just not available anywhere else. The forecasts on platforms like Kalshi have consistently been more accurate than polls or pundits when it comes to events like elections or economic indicators. This isn't just helpful for traders like me; it's useful for anyone who wants a clearer picture of what might happen next, from journalists to regular folks trying to plan their lives. I also believe that allowing everyday people like me to participate in these markets is a good thing. It levels the playing field and keeps valuable insights from being locked up with big institutions.
I'm concerned, though, about the idea of banning or over-restricting these markets. If the CFTC makes it too hard to trade on regulated platforms like Kalshi, people will just turn to unregulated offshore alternatives. I've seen some of those sites, and they don't have the oversight or consumer protections that a CFTC-registered market offers. Pushing activity offshore doesn't solve problems; it makes them worse. Instead, I think the US should be leading the way in financial innovation. We shouldn't let other countries take the lead on something that could be a powerful tool for information and economic activity.
I do recognize that there are risks, like market manipulation. I've noticed that some markets could be vulnerable to bad actors, especially those who might have insider information or even the ability to influence outcomes for their own gain. I think providers like Kalshi should be required to collect more information from traders to prevent this, maybe by flagging suspicious patterns or verifying identities more thoroughly. This kind of targeted approach makes more sense to me than broad categorical bans. I'm particularly interested in your questions on insider information in Topic E, like Question 29 about whether informed traders help with price discovery. I think they can, but only if there are strong safeguards in place to stop abuse.
In closing, I urge the CFTC to support proportionate regulation that addresses specific risks without shutting down the benefits of prediction markets. Let's keep these markets safe, accessible, and innovative right here in the US. Thank you for considering my input.
Sincerely,
Aaron Solomon
