Comment Text:
Dear Chairman and Commissioners,
My name is Markus Spitz, and I'm a trader and investor from Ohio. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, published in 91 FR 12516. I strongly support the idea of well-regulated prediction markets and want to share why I think theyre valuable, both for me personally and for society at large.
As a trader, I rely on prediction markets to hedge real financial risks that impact my investments and personal finances. For example, Ive used event contracts on Kalshi to offset potential losses tied to economic indicators like inflation data or interest rate decisions. These arent just bets or games; theyre tools that help me manage uncertainty in a way that traditional markets sometimes cant. I know other small investors and businesses who do the same, whether its hedging against policy changes or election outcomes that could affect taxes or regulations. This isnt gambling. It takes research and judgment, just like trading stocks or commodities. Classifying event contracts as gaming ignores the legitimate economic purpose they serve, like price discovery and risk management.
I also value the freedom to participate in legal, regulated markets. Platforms like Kalshi operate under CFTC oversight, with clear rules and transparency. Thats a lot safer than the alternative. If prediction markets are banned or over-restricted, people like me wont just stop trading. Well be pushed to unregulated offshore platforms where theres no protection against fraud or manipulation. Id much rather trade on a regulated U.S. market where the CFTC can step in if something goes wrong. Banning these markets doesnt solve problems; it creates bigger ones by driving activity into the shadows.
Id like to address a couple of specific questions from the ANPR. On Question 15, regarding how to define gaming versus legitimate markets, I believe event contracts should be judged by their economic utility, not labeled as gambling just because they involve future events. And on Question 7, about balancing innovation and consumer protection, I think regulation should focus on enforcing existing laws against manipulation and insider trading, not broad prohibitions that stifle a useful tool.
Prediction markets give regular people like me a way to manage risk and access unique information. Theyre not perfect, and I get that there are concerns about bad actors. But the CFTC already has the authority to tackle manipulation and insider trading. Use those tools instead of punishing everyone with overly restrictive rules. I urge you to support proportionate regulation that keeps prediction markets accessible, safe, and legal in the U.S.
Thank you for considering my input.
Sincerely,
Markus Spitz
