Comment Text:
Dear Chairman and Commissioners,
My name is Andrew Houston, and I'm a trader and investor based in North Carolina. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing to express my strong support for well-regulated prediction markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to people like me, as well as to the broader public, and I urge you to craft rules that allow them to thrive under fair oversight.
As a trader, I've seen firsthand how prediction markets offer information you just can't get elsewhere. Their forecasts are often more accurate than polls or pundits, and that helps me make better decisions, not just in trading but in understanding the world. This isn't just good for me; it benefits everyone when better data is out there for public decision-making. I also use these markets to hedge real risks. For instance, I've traded contracts tied to economic indicators like inflation data to offset uncertainties that impact my investments. This isn't gambling. It takes research and judgment, much like trading stocks or commodities. Classifying event contracts as "gaming" would be a mistake; they serve legitimate economic purposes like price discovery and risk management.
I'm also a firm believer that regulated markets are the way to go. Platforms like Kalshi, under CFTC oversight, are far safer than unregulated offshore alternatives. If you over-restrict or ban these markets, you're pushing activity into less transparent spaces where consumer protections are nonexistent. I'd rather see the U.S. lead on this innovation with strong rules than cede ground to riskier venues. On consumer protection, I recognize concerns about manipulation or insider trading, but the CFTC already has powerful tools to address these issues in other derivatives markets. Use those existing safeguards and adapt them here instead of broad prohibitions that punish honest participants.
I'd like to touch on a couple of specific questions from your ANPR. Regarding Question 7 on balancing innovation and consumer protection, I think proportionate regulation is key. Protect users, but don't stifle a market that democratizes access to information. On Question 29 about inside information, I believe informed trading often improves price discovery. When knowledgeable traders participate, prices get more accurate, and that benefits everyone. The focus should be on enforcing existing laws against true insider abuse, not restricting the market itself.
In closing, I ask you to support proportionate regulation of prediction markets. Don't ban or overly restrict them. These markets give people like me a chance to participate in a fair, legal system that produces valuable insights and helps manage real risks. Let's keep them accessible and safe under your oversight.
Sincerely,
Andrew Houston
