Comment Text:
Dear Chairman and Commissioners,
My name is Russell Graziano, and I'm a sports analytics hobbyist from New York. I've been diving into data and probabilities for years, mostly for sports, but recently I've gotten into trading on prediction markets like Kalshi. I'm writing to comment on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I strongly support well-regulated prediction markets, and I want to share why they matter to me and why the CFTC should regulate them proportionately instead of imposing broad bans or over-restrictions.
As someone who geeks out on analytics, I can't overstate how valuable prediction markets are for accurate forecasting. I've seen firsthand how their pricing on elections and public events often beats polls or pundits. That information isn't just useful for traders like me; it helps everyone, from journalists to policymakers, make sense of what's likely to happen. Beyond that, these markets let me hedge real risks. For instance, I've used event contracts to offset potential financial hits from policy changes tied to election outcomes that could affect my personal budget. This isn't gambling. It takes research and judgment, just like any other investment. Classifying event contracts as "gaming" ignores their legitimate economic purpose, and I urge the CFTC to recognize this distinction when addressing questions like 15 through 22 on listed activities.
I'm also concerned about freedom to participate. Prediction markets level the playing field, letting hobbyists like me test our analyses against the crowd. Unlike gaming companies, which often use predatory tactics to drain consumers' wallets with high fees, platforms like Kalshi match buyers and sellers with just a small, transparent market-making fee. This setup protects casual predictors while letting us contribute to collective understanding. Banning or over-restricting these markets would push activity to unregulated offshore platforms, which are far riskier. I've looked at some of those alternatives, and they lack the safeguards of a CFTC-registered market. On questions 7 through 14 about public interest, I believe regulated markets clearly balance innovation with consumer protection better than driving users to sketchy offshore sites.
Finally, I think the US should lead in financial innovation. Why cede this space to other countries? Informed trading, even by those with strong insights, improves price discovery and benefits everyone, as posed in questions 29 through 32 on inside information. The CFTC already has tools to tackle manipulation or insider trading. Use those instead of broad bans that punish regular participants like me. Targeted, proportionate rules are the way to go.
I respectfully ask the CFTC to support prediction markets with fair regulation that addresses specific risks without shutting down this valuable tool. Let's keep the US at the forefront of innovation and protect consumers through oversight, not prohibition.
Sincerely,
Russell Graziano
