Comment Text:
Dear Chairman and Commissioners,
My name is Shawn Wang, and I'm a student from Pennsylvania writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I've used prediction markets a few times myself, and as someone studying and thinking about public policy and data, I believe theyre a valuable tool that deserves smart, balanced regulation rather than heavy restrictions or bans.
Ive seen firsthand how prediction markets can cut through the noise of polls and pundits to provide clearer forecasts on elections and other public events. A couple of years ago, I checked a platform like Kalshi before a major election, and its probabilities were way closer to the actual outcome than most news predictions. That kind of accuracy isnt just interesting to me as a student; its useful for everyone, from journalists to policymakers, who need reliable information to make decisions. I also think allowing regular people like me to participate in these markets isnt a problem. Its a strength. When everyday folks can trade based on what they know, the market gets better data, and the prices reflect a wider view of the world.
Im not blind to the risks, like manipulation or insider trading. But the CFTC already has strong tools to handle those issues in other markets, and I believe they can be applied here too. Banning or over-restricting prediction markets wont stop bad actors; itll just push activity to unregulated offshore platforms where theres no oversight at all. Id much rather see the CFTC focus on proportionate rules that target specific problems while keeping these markets legal and accessible on regulated platforms like Kalshi. Thats better for consumer protection and keeps the US competitive in financial innovation. We shouldnt be ceding this space to other countries.
I also want to touch on a few of your specific questions. Regarding Question 11 on price discovery, I think prediction markets absolutely contribute to better public information, and informed trading only improves that. On Question 15 about defining gaming, Id argue event contracts arent gambling at all; they serve real economic purposes like forecasting and even hedging risks for some users. And in response to Question 29 on inside information, I believe the benefits of informed trading for price accuracy outweigh the risks, especially since laws already prohibit federal employees from misusing nonpublic info.
As a student, I also care about the academic side. Prediction markets generate transparent data that researchers like me can study to understand public sentiment and decision-making. Thats a public good. I urge the CFTC to support well-regulated prediction markets with targeted rules, not broad bans that punish everyone for the actions of a few.
Thank you for considering my perspective.
Sincerely,
Shawn Wang
