Comment Text:
Dear Chairman and Commissioners,
My name is Patrick Collison, and I'm an everyday citizen from Illinois writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've used prediction markets a few times, and I believe they serve a valuable purpose when regulated properly. I'm asking you to support proportionate regulation of these markets rather than imposing broad bans or overly restrictive rules.
What I appreciate most about prediction markets is how they cut through the noise of media and punditry, especially on topics like politics and cryptocurrency. Talk is cheap, but when people put their money where their mouth is, you get a clearer picture of what they truly believe. I've seen this firsthand; the forecasts on these platforms often seem more accurate than polls or talking heads on TV. That kind of information isn't just useful for traders like me, it's valuable for the public and even policymakers who need reliable data to make decisions. I think this ties directly to your questions 7 and 8 in the ANPR about the public interest and price discovery benefits of event contracts.
I'm also concerned about consumer protection, which is why I strongly prefer regulated markets like Kalshi over unregulated offshore platforms. If the CFTC clamps down too hard, people will just move to less safe venues outside US oversight. That's not a solution; it's a bigger problem. Your existing tools to prevent manipulation and insider trading, which you ask about in questions 29 and 30, are already robust. I believe you can adapt those to handle event contracts without reinventing the wheel or banning entire categories. Informed trading, in my view, actually improves price discovery and benefits everyone in the market, not just a few insiders.
Another point I want to make is that event contracts aren't gaming. They serve real economic purposes, like hedging and forecasting, and shouldn't be lumped in with gambling. Classifying them that way, as discussed in questions 15 and 16, would be a mistake. The US has a chance to lead in financial innovation here, and I hope we don't cede that to other countries by over-regulating.
Finally, I'm asking for targeted, proportionate rules instead of broad prohibitions. Address specific risks like manipulation without punishing the majority of us who use these markets responsibly. I think your questions 23 and 24 about procedural aspects of public interest determinations could help guide this balance. Please support well-regulated prediction markets that allow everyday people like me to participate and benefit from better information.
Thank you for considering my perspective.
Sincerely,
Patrick Collison
