Comment Text:
Dear Chairman and Commissioners,
My name is Carson Valenta, and I'm a trader and investor based in Washington state. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I have strong feelings about this issue, and while I see real value in these markets, I also have serious concerns that I believe the CFTC needs to address.
I support well-regulated prediction markets because they provide information that's hard to find elsewhere. I've seen firsthand how the prices on these platforms often predict outcomes more accurately than polls or pundits. As a trader, I rely on that kind of data to make informed decisions, and I think it benefits society when we have access to better forecasts about elections, economic indicators, or other major events. Beyond that, I use prediction markets to hedge personal financial risks. For instance, I've traded contracts related to interest rate decisions to offset potential impacts on my investments. This isn't just speculation for me; it's a practical tool to manage uncertainty.
That said, I'm deeply worried about the state of these markets. Insider trading is a huge problem, and it's getting out of control. I've seen suspicious activity on platforms like Kalshi and Polymarket that makes me question whether the playing field is fair. It feels like some participants have access to information the rest of us don't, and that's not right. These platforms, in their current state, can be a disease to society if left unchecked. I'm not saying ban them outright, but something needs to be done before it's too late. The CFTC already has rules against manipulation and insider trading in other markets. Why not enforce those same standards here with real teeth?
Looking at some of the specific questions in the ANPR, I want to address Question 29 under Inside Information. I do think informed traders can help with price discovery, but only if the information is obtained legally and fairly. When it's not, it undermines the whole market. And on Question 7 under Public Interest, I believe the CFTC needs to strike a balance between innovation and consumer protection by cracking down hard on bad actors without killing the markets entirely.
I'm asking you to regulate prediction markets proportionately. Don't over-restrict or ban them, because they have real value for people like me who use them responsibly. But please, put strong measures in place to stop insider trading and manipulation. We can't let a few bad players ruin it for everyone.
Sincerely,
Carson Valenta
