Comment Text:
Dear Chairman and Commissioners,
My name is Christopher Hernandez, and I'm a small business owner from California. I run a retail business that deals with a lot of uncertainty, from supply chain disruptions to fluctuating costs tied to policy decisions. I'm writing to you about the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) because I strongly support well-regulated prediction markets and believe they are valuable for people like me.
I've been trading on platforms like Kalshi for a couple of years now, and it's become a crucial tool for managing risks that affect my business. For example, I use prediction markets to hedge against potential changes in trade policies or economic indicators like inflation reports that could impact my inventory costs. This isn't just gambling, as some might claim. It takes real research and judgment to make informed trades, much like any other investment. The information I get from these markets, the aggregated wisdom of many traders, often feels more reliable than what I hear from news outlets or even industry reports. It's a unique resource that helps me plan better.
What really concerns me is the idea of over-restricting or banning these markets. I understand there are risks, like potential manipulation or insider trading. But those issues are already illegal under existing laws, and the CFTC has the power to enforce them. Shutting down regulated platforms like Kalshi doesn't stop bad actors; it just pushes activity to unregulated offshore sites where there's no oversight at all. I've seen what happens when markets go underground in other industries. It’s not safer for anyone. Regulated markets here in the US are transparent, accountable, and far better for protecting consumers like me.
I also think about US competitiveness. We should be leading the way in financial innovation, not letting other countries take the lead because we're too cautious. Prediction markets are a cutting-edge tool, and if we stifle them, we risk losing talent and business to places with fewer restrictions. Regarding some of your specific questions, like those in Topic B on public interest (Questions 7-14), I believe the benefits of innovation and risk management outweigh the concerns when proper safeguards are in place. And on Topic D (Questions 23-28), I think the CFTC should focus on case-by-case evaluations rather than broad bans to avoid punishing legitimate uses.
I urge you to support proportionate regulation of prediction markets. Don't let fear of a few bad actors lead to rules that hurt small business owners like me who rely on these tools. Keep platforms like Kalshi operating under clear, fair oversight so we can continue to benefit from them safely.
Thank you for considering my input.
Sincerely,
Christopher Hernandez
