Comment Text:
Dear Chairman and Commissioners,
My name is Daniel Sheyner, and I'm a trader and investor based in New York. I've been actively trading on prediction markets like Kalshi and Polymarket for a while now, and Im writing to express my strong support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to individuals like me, as well as to society at large, and I urge the CFTC to craft rules that support their growth rather than restrict or ban them.
As a trader, Ive seen firsthand how prediction markets often produce forecasts that are more accurate than polls or pundits. Whether its an election outcome or a major public event, the aggregated wisdom of these markets cuts through noise and bias in a way traditional sources just cant match. This isnt just useful for me in making trading decisions; its valuable information for the public, media, and even policymakers who need reliable data to make informed choices. Beyond forecasting, I use these markets to hedge personal and business financial risks. For instance, Ive placed trades to offset potential impacts of election outcomes on my investments or federal policy changes that could affect my taxes. This isnt gambling. Its a legitimate economic tool, no different from hedging with futures or options in other markets.
Im also concerned about what happens if the CFTC over-restricts or bans these markets. Platforms like Kalshi, which operate under CFTC oversight, are transparent and safe. But if access is cut off here, activity will just move to unregulated offshore platforms where theres no oversight, no consumer protection, and far greater risks. Thats not a solution; its a step backward. And honestly, the US should be leading in financial innovation, not ceding ground to other countries. We have the chance to set the standard for how these markets operate globally.
Addressing some of your specific questions, Id like to touch on Question 7 from the Public Interest section and Question 15 from the Listed Activities section. On public interest, I believe prediction markets serve a clear benefit through price discovery and risk management, and informed trading only improves the accuracy of that pricing, benefiting everyone, not just traders. On the issue of gaming, I strongly believe event contracts are not gambling. They serve real economic purposes like hedging and information aggregation, and classifying them as gaming would be a misstep.
I understand concerns about manipulation or insider trading, but those are already illegal under existing laws, and the CFTC has the tools to enforce them. Shutting down entire markets to stop a few bad actors punishes honest participants like me. I respectfully ask the CFTC to develop proportionate regulations that address specific risks without stifling the benefits prediction markets offer. Lets keep these markets safe, accessible, and innovative right here in the US.
Thank you for considering my input.
Sincerely,
Daniel Sheyner
