Comment Text:
Dear Chairman and Commissioners,
My name is Christian Santos, and I'm a regular citizen from California writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've been actively trading on platforms like Kalshi for a while now, and I strongly support the idea of well-regulated prediction markets. I believe they provide unique value to people like me and to society as a whole, and I hope the CFTC will craft rules that allow these markets to thrive without over-restricting them.
I first got into prediction markets because I wanted better information about elections and other public events. Polls and pundits often get it wrong, but the prices on these platforms have consistently been more accurate in my experience. For instance, during the last election cycle, I saw predictions on Kalshi that cut through the noise of biased reporting and gave me a clearer picture of what might happen. This isn't just useful for traders, it's valuable for anyone trying to make sense of the world, whether you're a voter, a journalist, or even a policymaker. I think this ties directly to your questions 7 and 8 in the ANPR about the public interest and price discovery. These markets aggregate information in a way nothing else does.
I also believe that regulated markets like Kalshi are far safer than the unregulated offshore platforms out there. If the CFTC clamps down too hard, people won't stop trading, they'll just go to less transparent sites where there's no oversight. I'd much rather see the US take the lead on financial innovation and set a global standard for how these markets should work. This seems relevant to question 14 on balancing innovation and consumer protection. We can't afford to fall behind other countries on this.
Another point I care about is that event contracts aren't gambling. I put time into researching and understanding the events I'm trading on, just like I would with stocks or other investments. These contracts serve real purposes, like helping me hedge against outcomes that could affect my finances. Classifying them as "gaming" undercuts their economic value, and I hope the CFTC considers this when looking at questions 15 and 16 on listed activities. There's also a lot of academic research, from economists like Hanson and Wolfers, showing how prediction markets improve information and transparency. That data should guide your approach.
I'm not blind to the risks. I know insider trading and manipulation are concerns. But those are already illegal, and the CFTC has tools to address them without banning entire markets. Let's not punish everyone for the actions of a few.
I urge you to support proportionate regulation of prediction markets. Don't ban or over-restrict them. Allow platforms like Kalshi to operate under clear, fair rules that protect consumers while preserving the benefits these markets bring to people like me.
Sincerely,
Christian Santos
