Comment Text:
Dear Chairman and Commissioners,
My name is Daniel Marshi, and I'm a trader and investor based in New York. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to express my strong support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to individuals like me, to businesses, and to society as a whole, and I urge the CFTC to craft rules that support their growth rather than restrict them.
As a trader, Ive seen firsthand how prediction markets offer information you cant get anywhere else. Their forecasts on elections, economic data, and other events consistently beat out polls and pundits. Ive used this data not just for trading but to better understand the world around me. This kind of price discovery isnt just helpful for traders; its a public good that can inform better decision-making for everyone, from policymakers to regular citizens. I think the CFTC should recognize this value when addressing questions like 7 and 8 in your ANPR about the public interest and price discovery benefits of event contracts.
I also want to stress that regulated markets like Kalshi are a far safer place for people like me to participate compared to unregulated offshore platforms. If the CFTC over-restricts or bans these markets, it wont stop trading; itll just push folks to less safe, less transparent venues. Thats a worse outcome for consumer protection, which ties into your questions 9 and 10 about balancing innovation with safety. Plus, allowing platforms like Kalshi to operate under CFTC oversight keeps the U.S. competitive in financial innovation. We shouldnt cede leadership in this space to other countries, a point relevant to question 14 on public interest considerations.
Beyond that, prediction markets arent just about speculation. They help me and others hedge real risks. For instance, Ive used them to offset uncertainties tied to economic policy changes that impact my investments. Businesses can do the same for regulatory or political risks. This practical utility, as discussed in question 11 on risk management, shows these markets arent gambling; theyre tools for stability.
Lastly, I know there are concerns about manipulation or insider trading, but the CFTC already has strong tools to tackle those issues. Youve got authority to go after bad actors in any regulated market, as noted in questions 1 and 29. Banning or over-restricting prediction markets to stop a few bad apples punishes honest participants like me. Use the existing laws and focus on enforcement instead.
Im grateful for the chance to comment, and I strongly encourage the CFTC to support proportionate regulation of prediction markets. Lets keep these markets accessible, safe, and innovative under your oversight, without unnecessary bans or restrictions.
Sincerely,
Daniel Marshi
