Comment Text:
Dear Chairman and Commissioners,
My name is Zachary Ayotte, and I'm just a regular guy from Nebraska who cares about having a fair shot at participating in legal, regulated markets. I actively trade on prediction markets like Kalshi, and Im writing to share why I support well-regulated prediction markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). Ive seen firsthand how useful these markets can be, and I believe the CFTC should encourage their growth with sensible rules, not heavy-handed bans.
I started trading on prediction markets because they give me information I cant find anywhere else. The prices often predict outcomes better than polls or pundits, whether its an election or an economic indicator. Thats not just helpful for me as a trader; its valuable for everyone, from regular folks making decisions to policymakers looking at trends. I also use these markets to hedge real risks. For example, Ive placed trades on election outcomes that could impact my taxes or local business regulations here in Nebraska. Its not gambling, its a practical way to manage uncertainty, much like any other investment.
Im glad the CFTC is thinking about regulation, but I worry about over-restricting or banning these markets. If platforms like Kalshi, which are regulated and transparent, get shut down, people like me will just turn to offshore sites with no oversight. Thats less safe for consumers and bad for the US, which should be leading in financial innovation instead of pushing it overseas. Ive read academic research showing how prediction markets improve information and price discovery, often outperforming other forecasting tools. Informed trading isnt a problem; it makes the market better for everyone by reflecting real knowledge.
Addressing some of your specific questions, like those in Topic B on public interest (Questions 7-14), I believe prediction markets serve a clear public good through better information and risk management. On Topic C about listed activities (Questions 15-22), I strongly feel event contracts arent gaming. They have legitimate economic purposes, like hedging or price discovery, and shouldnt be lumped in with gambling. And on Topic E regarding inside information (Questions 29-32), I think the CFTC already has strong tools to stop manipulation and insider trading. Use those existing powers instead of broad bans that hurt regular traders like me.
Im not blind to the risks. Yes, some might try to game the system, but punishing everyone for a few bad actors doesnt make sense. Targeted, proportionate regulation can address specific issues without killing off a useful tool. Please support prediction markets with fair rules that let everyday people participate safely while keeping the US at the forefront of innovation.
Thank you for considering my views.
Sincerely,
Zachary Ayotte
