Comment Text:
Dear Chairman and Commissioners,
My name is James McKittrick, and I'm a lawyer based in Maryland. I'm writing to express my strong support for the proportionate regulation of prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, published in 91 FR 12516. As someone who actively trades on platforms like Kalshi and Polymarket, I've seen firsthand the value these markets provide, and I believe the CFTC has a critical opportunity to foster innovation while protecting consumers.
Prediction markets aren't just a hobby for me; they're a tool for understanding the world. I've found their forecasts on elections and public events to be consistently more accurate than polls or pundits. This isn't speculation or gambling, it's a way to aggregate real information that benefits everyone, not just traders. Beyond forecasting, these markets let me hedge personal and professional financial risks. For instance, I've used event contracts to offset uncertainties tied to policy changes that could impact my legal practice or personal finances. This hedging utility is a legitimate economic purpose, not gaming, and I urge the CFTC to recognize this distinction when addressing Questions 15-22 on listed activities.
I also want to emphasize the importance of regulated markets over unregulated alternatives. Platforms like Kalshi, operating under CFTC oversight, provide transparency and accountability that offshore sites can't match. Banning or over-restricting prediction markets, as considered in Questions 7-14 on public interest, would only push activity to less safe venues. The U.S. should lead in financial innovation, not cede ground to other countries. Regulated markets are the way to ensure consumer protection while keeping the benefits of these tools accessible to Americans like me who value the freedom to participate in legal, well-monitored systems.
On the issue of manipulation and insider trading, raised in Questions 29-32, I believe the CFTC already has robust tools to address these risks. Existing laws prohibit federal employees from trading on nonpublic information, and the Commission's authority to combat market manipulation is well-established. Informed trading often improves price discovery, benefiting all participants, and the answer to potential abuse isn't to shut down entire markets but to enforce the rules already in place. Broad categorical bans, as opposed to targeted regulation, would punish law-abiding users and stifle innovation.
I ask the CFTC to adopt a balanced approach that supports prediction markets through proportionate regulation. Address specific risks with focused rules rather than sweeping prohibitions. Keep the U.S. at the forefront of financial innovation, and ensure that individuals and businesses can continue to use these markets for forecasting and hedging. Thank you for considering my perspective.
Sincerely,
James McKittrick
