Comment Text:
Dear Chairman and Commissioners,
My name is Evan Del Pero, and I'm a trader and investor based in California. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've been actively trading on platforms like Kalshi, and I strongly support the development of well-regulated prediction markets in the United States. I believe they provide unique value to individuals like me and to society as a whole, and I urge the CFTC to craft rules that encourage innovation while addressing specific risks with targeted solutions.
As a trader, I rely on prediction markets for insights that I can't get from polls or pundits. I've seen firsthand how these markets often forecast election outcomes and other public events more accurately than traditional sources. For example, during the last election cycle, Kalshi's market prices gave me a clearer picture of likely outcomes than any news outlet or survey. This isn't just useful for me; it helps everyone, from policymakers to everyday citizens, make better-informed decisions. Price discovery in these markets is a public good, and allowing regular people like me to participate democratizes access to valuable information.
I also want to stress that event contracts are not gambling. Trading on prediction markets requires research, analysis, and real-world judgment, much like trading stocks or commodities. Classifying them as "gaming," as discussed in Questions 15-22 of the ANPR, ignores their legitimate economic purposes, like hedging and forecasting. I often use these markets to hedge personal financial risks tied to political or economic events, and that utility shouldn't be dismissed.
I'm concerned that overly restrictive rules or outright bans would push activity to unregulated offshore platforms, which are far less safe than CFTC-registered markets like Kalshi. On regulated platforms, I know there are protections in place. The CFTC already has strong tools to combat manipulation and insider trading, as noted in Questions 1-6 and 29-32. Instead of broad prohibitions, I believe the Commission should use those existing powers to address bad actors without punishing the rest of us. Plus, informed trading actually improves price discovery, benefiting all participants by making market signals sharper.
Finally, I think the US has a chance to lead in financial innovation. If we over-regulate or ban prediction markets, as touched on in Questions 7-14 about public interest, we risk ceding ground to other countries. Academic research, which I follow closely as a data-driven trader, consistently shows these markets aggregate information efficiently. We should build on that, not stifle it.
I respectfully ask the CFTC to support proportionate regulation of prediction markets. Address specific risks with focused rules, but please don't ban or over-restrict these valuable tools. Thank you for considering my input.
Sincerely,
Evan Del Pero
