Comment Text:
Please press the COPY button above and paste here.Dear Chairman and Commissioners,
My name is Marc Pedersen, and I'm a business owner based in New York. I work with numerous business owners and startups, helping them navigate financial and strategic challenges. I've used prediction markets a few times myself, and I've seen firsthand the value they bring to people like me and the businesses I advise. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my strong support for proportionate, well-regulated prediction markets in the United States.
Prediction markets aren't just a niche hobby. They provide unique information that helps with forecasting critical events like elections or policy changes, which directly impact the small businesses I work with. For instance, knowing the likelihood of a tariff change or regulatory shift can make or break an importer's planning. I've advised clients who use these markets to hedge risks tied to economic or political uncertainty, whether it's a tax policy shift or a Federal Reserve decision. This isn't gambling. It's a practical tool for managing real financial exposure, much like any other derivative market.
I also value the freedom to participate in legal, regulated markets. Platforms like Kalshi, operating under CFTC oversight, are far safer than unregulated offshore alternatives. If we ban or over-restrict these markets, we're pushing activity to places with no consumer protections, no oversight for insider trading, and no accountability. Look at Europe. When they've banned certain industries, it led to a massive exodus to offshore operations, leaving consumers exposed to worse risks. We can't let that happen here. The US should lead in financial innovation, not cede ground to other countries.
I'm not blind to the concerns about manipulation or insider trading. But the CFTC already has robust tools to address these issues in other markets. Use those same powers here. Banning broad categories of event contracts punishes everyone for the actions of a few bad actors. Targeted regulation, focused on specific risks, is the better path. Plus, informed trading actually improves price discovery. When knowledgeable participants trade, the resulting prices are more accurate, and that benefits everyone, not just traders.
I want to touch on a few of your specific questions. On Question 7, about balancing innovation and consumer protection, I believe regulated markets strike that balance by keeping activity onshore where rules can be enforced. On Question 29, regarding inside information, I think informed traders often enhance market accuracy, and existing laws already prohibit abuse by federal officials or others with nonpublic data. And on Question 33, event contracts serve real economic purposes like hedging and forecasting. They shouldn't be classified as gambling.
I urge the CFTC to support proportionate regulation of prediction markets. Don't ban or over-restrict them. Keep the US at the forefront of financial innovation while protecting consumers through smart, targeted rules. Thank you for considering my input.
Sincerely,
Marc Pedersen
