Comment Text:
Dear Chairman and Commissioners,
My name is Micah Lonh, and I'm a trader and investor based in Washington state. I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. As someone who actively trades on platforms like Kalshi, I strongly support the development of well-regulated prediction markets, and I urge the CFTC to craft rules that encourage their growth while addressing legitimate risks.
I've been trading on prediction markets for a while now, and I've seen firsthand how valuable they are. The data these markets produce isn't just numbers; it's insight you can't get from polls or talking heads on TV. Academic research backs this up, studies by economists like Justin Wolfers and Eric Zitzewitz show that prediction markets consistently outperform traditional forecasting methods. I rely on this information to make better decisions, not just in trading but in understanding the world. If anything, I think the public would benefit from even more transparency in how this data is aggregated and shared. It's not just for traders like me; it's for everyone who wants a clearer picture of what's likely to happen, whether it's an election or an economic shift.
I know there are concerns about manipulation or insider trading, and I get that. Those are real risks. But the CFTC already has tools to tackle fraud and manipulation in other markets, and those can work here too. Banning or over-restricting prediction markets because of a few bad actors feels like punishing everyone for something that's already illegal. Plus, pushing these markets offshore to unregulated platforms would only make things worse. I'd rather see the U.S. lead on this with smart, fair rules.
Specifically, on some of the questions in your ANPR, I think Question 7 about balancing innovation and consumer protection is key. Prediction markets are innovative, and they democratize access to information. Regular people like me can participate, not just big institutions. And for Question 11 on price discovery, I believe these markets are a public good because they reveal probabilities that help everyone make sense of uncertainty. I hope the CFTC considers the academic evidence on forecasting accuracy when weighing these issues.
I'm asking you to support proportionate regulation that lets prediction markets thrive while targeting specific risks with existing tools. Don't shut down something so useful over fears that can be managed. Thank you for considering my perspective as you shape these rules.
Sincerely,
Micah Lonh
