Comment Text:
Dear Chairman and Commissioners,
My name is Josh Day, and I'm a student based in Massachusetts. I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've used prediction markets a few times, and I believe they serve a valuable purpose when properly regulated. I want to urge the CFTC to support well-regulated prediction markets rather than imposing overly restrictive rules or outright bans.
As a student, I'm always looking for ways to better understand the world around me, especially when it comes to elections and major public events. Prediction markets have been a unique tool for me in this regard. The prices often seem to cut through the noise of pundits and polls, giving a clearer picture of what might happen. I remember checking a platform during the last election cycle, and the odds there were more on point than a lot of the news predictions I was seeing. That kind of forecasting isn't just useful for traders; it helps anyone trying to make sense of complex events.
I strongly believe in the freedom to participate in legal, regulated markets. Platforms like Kalshi, which operate under CFTC oversight, offer a safe space for people like me to engage with these markets. I've read about unregulated offshore platforms, and they sound risky with little accountability. If the CFTC clamps down too hard on regulated markets, I worry it will push activity to those shadier venues where there's no protection for participants. Keeping markets regulated here in the US seems like the smarter way to go.
Another point I care about is how informed trading actually makes prediction markets better. When people who know a lot about a topic trade, their input helps the prices reflect reality more accurately. That benefits everyone, not just the traders. I know there are concerns about insider trading, and I get that it's a real issue. But isn't it already illegal? The CFTC has tools to tackle manipulation and bad actors without shutting down entire markets. Banning prediction markets to stop a few cheaters feels like punishing everyone for the actions of a few.
I'm particularly drawn to Questions 7 and 29 from your ANPR. On Question 7, about balancing innovation and consumer protection, I think regulated markets strike that balance by encouraging new tools for forecasting while keeping guardrails in place. For Question 29, regarding informed traders and price discovery, I believe their participation is a net positive as long as rules against insider trading are enforced.
I hope the CFTC will craft rules that allow prediction markets to thrive under proportionate regulation. Please don't let over-restriction or broad bans limit access to these valuable tools. Thank you for considering my perspective.
Sincerely,
Josh Day
