Comment Text:
Dear Chairman and Commissioners,
My name is Jordan Hernandez, and I'm a student from Washington state writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've been actively trading on platforms like Kalshi, and I believe well-regulated prediction markets offer real value to people like me and to society as a whole. I want to urge the CFTC to support proportionate regulation rather than imposing bans or overly tight restrictions.
As a student, Im constantly digging into data and research, and prediction markets have been an incredible tool for understanding public events. Ive seen firsthand how their forecasts on elections and other major events often beat out polls or pundit opinions. The prices reflect a kind of crowd wisdom thats hard to find anywhere else. This isnt just useful for traders; its valuable for anyone trying to make sense of the world, from journalists to policymakers. Plus, Ive used these markets to hedge personal risks, like betting on economic outcomes that could impact my future job prospects or student loan rates. This isnt gambling. Its a practical way to manage uncertainty, much like any other financial tool.
I also worry about what happens if these markets are over-restricted. Platforms like Kalshi, which operate under CFTC oversight, provide a safe and transparent space to trade. If regulations become too harsh, people wont stop trading; theyll just move to unregulated offshore sites where theres no accountability. Thats a worse outcome for everyone. Regulation should keep markets fair and accessible, not push activity into the shadows.
On a related note, I think informed trading is a strength of these markets, not a flaw. When people with knowledge contribute to the price, it makes the forecasts sharper and benefits all participants. This ties directly to some of the CFTCs questions, like Question 29 on whether informed traders aid price discovery. I believe they do, and the focus should be on enforcing existing laws against insider trading rather than limiting who can participate.
From an academic perspective, I also value the data transparency these markets provide. They generate insights that researchers like me can study to better understand public sentiment and risk. This aligns with Question 7 on balancing innovation and consumer protection. I think the CFTC can strike that balance by crafting rules that address specific risks without stifling the benefits.
Prediction markets arent just a niche hobby. They serve real economic purposes, whether its forecasting or hedging. I ask the CFTC to regulate them thoughtfully, ensuring platforms like Kalshi can operate while keeping bad actors in check. Dont let heavy-handed rules or outright bans undermine something so useful to students, businesses, and the public.
Thank you for considering my input.
Sincerely,
Jordan Hernandez
