Comment Text:
Dear Chairman and Commissioners,
My name is Alejandro Baca, and I'm a cybersecurity consultant based in Washington state. I've been actively trading on prediction markets like Kalshi for a while now, and 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 (91 FR 12516). As someone working in tech, I see the value of innovation and data-driven tools, and I believe prediction markets are a powerful way to aggregate information while giving everyday people like me a chance to participate in financial systems.
I rely on platforms like Kalshi to make informed bets on events that impact my life, from economic indicators to policy outcomes. These aren't just games; they require research and real-world judgment, much like any other investment. I don't view this as gambling but as a legitimate economic activity with real purposes, like hedging risks or gaining insight into future events. Classifying event contracts as "gaming" (as raised in Questions 15-22) ignores their value in price discovery and risk management. Informed trading, as discussed in Questions 29-32, actually improves the accuracy of these markets, benefiting everyone, not just traders.
What worries me is the risk of over-restriction or outright bans. If the U.S. clamps down too hard, activity will just move to unregulated offshore platforms where there are no consumer protections. I've seen enough in tech to know that banning innovation doesn't stop it; it just pushes it out of reach of oversight. Regulated markets like Kalshi are far safer, with transparency and accountability built in. The CFTC should focus on proportionate, targeted rules to address specific risks like manipulation or insider trading (as in Questions 1-6) rather than broad categorical bans. Existing laws already cover a lot of these concerns, so let's enforce those instead of punishing legitimate participants.
I also think the U.S. has a chance to lead in financial innovation here. Prediction markets are backed by solid academic research showing their ability to forecast more accurately than polls or pundits. If we over-regulate, we risk ceding this cutting-edge space to other countries. I want the U.S. to be at the forefront, not playing catch-up. On Questions 7-14 about public interest, I believe balancing innovation with consumer protection means keeping these markets accessible under fair rules, not shutting them down.
I'm asking the CFTC to support proportionate regulation that allows prediction markets to thrive while addressing real risks with targeted solutions. Don't let over-restriction push this valuable tool offshore or out of reach for regular people like me. Thank you for considering my perspective.
Sincerely,
Alejandro Baca
