Comment Text:
Dear Chairman and Commissioners,
My name is Aldo Ortega, and I'm a trader and investor based in California. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to share my support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to people like me and to society as a whole, and I urge the CFTC to adopt a balanced, proportionate approach to regulation rather than imposing broad bans or overly restrictive rules.
As a trader, Ive seen firsthand how prediction markets offer information you cant get anywhere else. The prices reflect real-time, crowd-sourced insights that often outpace polls or pundits, especially on things like elections or economic events. This isnt just helpful for traders; its better information for everyone, from policymakers to regular citizens trying to make sense of the world. I also use these markets to hedge personal financial risks. For instance, Ive traded contracts tied to interest rate decisions to offset uncertainties around my investments. This isnt gambling. Its a calculated decision based on research and judgment, much like trading stocks or commodities. Labeling event contracts as gaming ignores their legitimate economic purpose, like price discovery and risk management.
Im aware of concerns about manipulation or insider trading, and I get why those are issues. But the CFTC already has strong tools to tackle these problems. Laws against market manipulation and insider trading apply to regulated markets like Kalshi, and federal employees are already barred from trading on nonpublic information. The answer isnt to ban or over-restrict prediction markets; its to enforce the rules youve got. Shutting down these markets would just push activity to unregulated offshore platforms, which are far riskier for consumers like me. Regulation, not prohibition, is the way to protect people.
I also want to address some specific questions from the ANPR. On Question 7 about balancing innovation and consumer protection, I believe the US must lead in financial innovation. If we over-regulate or ban prediction markets, other countries will step in, and well lose our edge. On Question 15 regarding the definition of gaming, I strongly feel event contracts arent gambling; theyre tools for forecasting and hedging that benefit the public. And on Question 29 about inside information, I think informed trading actually improves price discovery. The more knowledgeable participants, the more accurate the market becomes, which helps everyone.
Prediction markets democratize access to information and give regular people like me a chance to participate in a fair, regulated space. Ive read the academic research, like studies by economists such as Justin Wolfers, showing how these markets aggregate information efficiently. Lets not throw that away with heavy-handed rules. I ask the CFTC to support proportionate regulation that targets specific risks without banning entire categories of contracts or stifling innovation.
Thank you for considering my input.
Sincerely,
Aldo Ortega
