Comment Text:
Dear Chairman and Commissioners,
My name is John Erwin, and Im a finance professional based in New York. Ive been working in the financial sector for over a decade, analyzing markets and managing risks for both myself and my clients. Im writing to express my strong support for well-regulated prediction markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). Ive actively traded on platforms like Kalshi and Polymarket, and I believe these markets provide unique value that shouldnt be stifled by overly restrictive rules.
Prediction markets arent just a hobby for me; theyre a practical tool. As someone who deals with financial uncertainty every day, I use these platforms to hedge real risks. For instance, Ive placed trades on election outcomes to offset potential tax policy changes that could impact my small consulting business. Ive also used markets tied to economic indicators like CPI to manage personal exposure to rising costs. This isnt gambling. Its a calculated way to protect myself, much like using futures or options in traditional markets. Id argue event contracts serve a clear economic purpose, whether its hedging or gaining insight into public events. Treating them as gaming, as some might suggest, ignores their real utility.
I also value the forecasting power of these markets. Ive seen firsthand how their predictions on elections and other events often outpace polls or punditry. That kind of aggregated wisdom helps me make better decisions, and its a public good for everyone, not just traders. But what concerns me is access. If the CFTC over-regulates or bans broad categories of event contracts, regular people like me lose out. Worse, it pushes activity to unregulated offshore platforms where theres no oversight. Id much rather trade on a CFTC-registered market like Kalshi, where I know there are safeguards, than take my chances in a gray area. Regulated markets are safer, period.
Id like to address a couple of your specific questions from the ANPR. On Question 7, regarding public interest, I believe prediction markets strike a balance between innovation and protection when regulated properly. They shouldnt be curtailed just because of hypothetical risks. And on Question 15, about defining gaming, I urge you not to lump event contracts with gambling. Their purpose is economic, not recreational. Finally, on a broader note, the US has a chance to lead in financial innovation. We shouldnt cede that to other countries by over-restricting these markets.
Im not blind to concerns like insider trading or manipulation. But the CFTC already has tools to tackle those issues. Use them, dont punish the rest of us by shutting down access. I respectfully ask that you support proportionate regulation of prediction markets, focusing on targeted rules for specific risks rather than broad bans or limits. Lets keep these markets legal, safe, and open to participants like me.
Sincerely,
John Erwin
