Comment Text:
Dear Chairman and Commissioners,
My name is Brian McNiff, and I'm a software engineer from Massachusetts. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my support for well-regulated prediction markets. As someone who actively trades on platforms like Kalshi and Polymarket, I see real value in these markets, but I also recognize some serious flaws that need addressing through thoughtful regulation, not outright bans.
I got into prediction markets because they offer insights I can't find anywhere else. As a tech professional, I'm drawn to data-driven systems, and these markets aggregate information in ways that often outpace traditional polls or expert opinions. Academic research backs this up, showing how prediction markets can improve forecasting and transparency. That kind of data isn't just useful for traders like me; it benefits society by making hidden trends visible. But I'll be honest, my experience on platforms like Kalshi has been tainted by what looks like rampant insider trading. It undermines the legitimacy of the market when some participants clearly have an unfair edge. I'd jump to a platform that prioritized cracking down on this if one existed.
This brings me to why I'm writing. I strongly believe the CFTC should focus on proportionate, targeted regulation instead of broad categorical bans. Insider trading and manipulation are real problems, but they're not unique to prediction markets. They're already illegal, and the CFTC has tools to enforce against bad actors. Shutting down entire markets or slapping on overly restrictive rules punishes everyone, including people like me who trade in good faith. I'd rather see the CFTC adapt existing safeguards to address specific risks, like insider trading, without killing off the innovation these platforms represent. Banning markets won't stop the activity; it'll just push it to unregulated offshore sites where there's even less oversight.
I'm particularly interested in your questions on inside information, specifically Question 29 about whether informed traders aid price discovery. I think they can, but only if the playing field is level. Right now, it's not. I also want to weigh in on Question 7 under Public Interest, about balancing innovation with consumer protection. I believe you can do both by focusing on transparency and enforcement rather than blanket prohibitions.
Prediction markets aren't perfect, and I get the concerns about manipulation or unfair advantages. But as someone who values data and fairness, I think the answer is to fix those issues with smart rules, not to throw out the whole concept. I urge the CFTC to support regulated prediction markets with targeted policies that address real problems like insider trading while preserving the benefits of these platforms for people like me.
Thank you for considering my input.
Sincerely,
Brian McNiff
