Comment Text:
Dear Chairman and Commissioners,
My name is Dilipvarma Yeskepalli, and I'm a software engineer based in Texas. I'm 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, and I strongly support their development under fair, proportionate regulation by the CFTC.
As someone in tech, I value data-driven tools that cut through noise and provide real insights. Prediction markets do exactly that. I've seen firsthand how their forecasts on elections and public events often beat polls or pundits. That kind of accuracy isn't just interesting, it's useful for everyone, from individuals like me to businesses and even policymakers who need reliable information. I also appreciate how these markets let regular people like me participate in a system that aggregates knowledge. It's not about gambling, it's about research and judgment, much like investing in stocks. Classifying event contracts as "gaming" feels wrong when they serve real economic purposes like price discovery and hedging risks. For instance, I've used these markets to hedge personal financial concerns tied to policy changes, and I know businesses in my network rely on them to manage risks from regulatory shifts or economic events.
I'm also concerned about what happens if we over-restrict or ban these markets. I've noticed that regulated platforms like Kalshi offer transparency and protections that offshore alternatives simply don't. If the CFTC clamps down too hard, activity will just move to less safe, unregulated spaces outside US jurisdiction. That hurts consumers and cedes leadership in financial innovation to other countries. The US should be at the forefront of this space, not playing catch-up.
I understand there are risks, like manipulation or insider trading. But the CFTC already has strong tools to tackle those issues in other derivatives markets. There's no need for broad bans when targeted rules can address specific problems. On the flip side, informed trading actually helps. It improves price discovery, which benefits everyone participating. I'd urge you to consider academic research on this, which consistently shows prediction markets are powerful for aggregating information.
Looking at some of your specific questions, I want to address a few from the ANPR. On Public Interest (Questions 7-14), I believe the balance tips toward innovation when markets are regulated properly, as they provide unique forecasting and hedging value. On Listed Activities (Questions 15-22), event contracts shouldn't be lumped in with gaming; they have legitimate uses. And on Inside Information (Questions 29-32), I think informed traders often enhance accuracy, as long as existing laws against insider trading are enforced.
In closing, I ask the CFTC to support prediction markets with clear, proportionate regulation. Don't ban or over-restrict them. Keep these markets accessible, safe, and innovative right here in the US. Thank you for considering my perspective.
Sincerely,
Dilipvarma Yeskepalli
