Comment Text:
Dear Chairman and Commissioners,
My name is Joseph Hernandez, and I'm a trader and investor based in California. I'm writing to express my strong support for well-regulated prediction markets 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 for some time now, and I believe these markets provide a unique and valuable tool that deserves thoughtful regulation, not outright restrictions or bans.
As someone who spends a lot of time analyzing markets, I can tell you that prediction markets consistently offer insights I can't find anywhere else. I've seen firsthand how they produce forecasts for elections and other public events that are often more accurate than polls or pundit opinions. For example, during the last election cycle, I relied on prediction market data to get a clearer picture of likely outcomes, and it cut through the noise of biased reporting and flawed surveys. This isn't just useful for traders like me. It's valuable for anyone who wants a more reliable sense of what's coming, whether that's journalists, policymakers, or just regular folks trying to understand the world.
I know there are concerns about manipulation or insider trading in these markets, and I get that. But banning or over-restricting prediction markets isn't the answer. The CFTC already has strong tools to tackle fraud and manipulation in other derivatives markets, and those can be applied here too. Plus, laws already prohibit federal employees and officials from trading on nonpublic information. Punishing everyone by shutting down these platforms because of a few bad actors feels like overkill. It's like closing the stock market over insider trading scandals. We need enforcement of existing rules, not broad prohibitions.
I'm particularly interested in the questions you raised in the ANPR under Topic B, Public Interest, especially Question 7 about balancing innovation with consumer protection. I think prediction markets are a clear case of innovation that benefits the public through better forecasting, and regulation should focus on keeping them safe without stifling their potential. Also, regarding Question 11 on price discovery, I believe these markets are unmatched in aggregating information efficiently, often outperforming traditional methods.
I urge the CFTC to support proportionate regulation that allows prediction markets to thrive while addressing specific risks with targeted rules. Let's keep the U.S. at the forefront of financial innovation and ensure that platforms like Kalshi can continue providing this unique value under a fair regulatory framework. Thank you for considering my perspective.
Sincerely,
Joseph Hernandez
