Comment Text:
Dear Chairman and Commissioners,
My name is Nathan Feenstra, and I'm a trader and investor from Michigan. 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 your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to people like me, as well as to society at large, and I urge you to regulate them proportionately without imposing overly restrictive rules or outright bans.
As a trader, I've seen firsthand how prediction markets offer information you can't get anywhere else. Their forecasts on elections and public events consistently beat polls and pundits. Ive used these insights to make better decisions, not just in trading but in understanding the world around me. This isnt just helpful for those of us who participate; the aggregated data benefits everyone, from policymakers to regular folks trying to make sense of complex issues. I think this ties directly to your questions on public interest and price discovery in Topic Area B, especially Questions 7 and 9. These markets are a tool for better decision-making, not a problem to be squashed.
I also use prediction markets to hedge real risks. Whether its an election outcome that could impact my taxes or a policy change that might affect my investments, these event contracts let me manage uncertainty in a way traditional markets often cant. This isnt gambling, despite what some might claim. It takes research and judgment, much like trading stocks or commodities. Classifying these contracts as "gaming" under Topic Area C (Question 15) would be a mistake. They serve legitimate economic purposes, and I hope the CFTC recognizes that.
Im also concerned about consumer protection, which is why I strongly prefer regulated markets over offshore alternatives. If the U.S. cracks down too hard, people like me will just turn to less safe platforms. The U.S. should lead in financial innovation, not cede ground to other countries. On insider trading and manipulation concerns from Topic Area E (Questions 29-31), Ill point out that the CFTC already has solid tools to tackle these issues in other derivatives markets. Plus, informed trading often improves price discovery, which benefits everyone. Lets not punish the majority for the actions of a few bad actors. Targeted rules, not broad bans, are the answer.
I urge you to support proportionate regulation that allows prediction markets to thrive while addressing specific risks. Dont over-restrict or ban these valuable tools. Thank you for considering my input.
Sincerely,
Nathan Feenstra
