Comment Text:
I support regulated prediction markets and believe that federal framework is preferable to unregulated offshore alternatives. However, the current framework is lacking. The following 9 points are the most crucial elements necessary for consumers like myself to safely enjoy apps like Kalshi and prediction markets as a whole.
1. DEPOSIT LIMITS
The Commission must require all CFTC-registered prediction market platforms to implement mandatory deposit limits. State-licensed sportsbooks already require this; there is no principled reason a federally regulated prediction market should offer weaker protections. Deposit limits should be mandatory and platforms should be required to honor them without a waiting period for increases.
2. MINIMUM AGE - 18
The Commission should establish a federal minimum age of 18 for prediction market participation, consistent with the legal age for contracts, military service, and voting. A 21-year minimum would be unnecessarily restrictive.
3. SELF-DEALING PROHIBITION
The Commission should prohibit any person from trading event contracts in which they are a named or identifiable participant - including political candidates trading on their own races, athletes trading on their own performance, and any individual trading on an outcome they have a direct personal role in influencing. Immediate family members should be explicitly exempted, as their connection to the outcome is indirect and the prohibition would otherwise be impractical to enforce.
4. INSIDER TRADING PREVENTION
Recent enforcement actions - including trading by an active-duty military officer on classified operational information - demonstrate that existing audit-trail models are insufficient to prevent insider trading before harm occurs. The Commission should require DCMs to implement pre-registration screening against federal employment databases, security-clearance registries, and other appropriate records for account holders seeking to trade in sensitive contract categories.
5. TIERED ACCESS FOR SENSITIVE CONTRACT CATEGORIES
The Commission should not prohibit event contracts tied to elections, financial markets, or military and geopolitical events, but access to these categories should require an enhanced background screening process, similar to the accredited-investor framework in securities regulation.
Trading on sensitive contracts - including those tied to U.S. or foreign political races, regulated financial instruments, or world events with a military or national security component - should require verified clearance confirming the participant has no disqualifying government role, active security clearance, or direct professional connection to the underlying event. All other contracts remain open under standard onboarding.
6. ONE POSITION PER SIDE PER CONTRACT
The Commission should limit each account to one "yes" and one "no" position per contract, with dollar amounts at the trader's discretion within their deposit limit. This prevents volume stacking, compulsive doubling down, and market cornering while preserving full participation rights.
7. FRAUD REPORTING AND ACCOUNT FREEZE IN LIEU OF DISPUTE RESOLUTION
The Commission should require platforms to provide a fraud reporting mechanism allowing users to flag unauthorized account or payment access, triggering an immediate account freeze pending re-verification of identity. Financial fraud resolution should proceed through the user's bank, not the platform. Beyond unauthorized access, legitimate disputes are rare on a properly structured market - verified adults consent to platform terms at deposit, and outcomes are governed by the published contract rulebook.
8. PROBLEM GAMBLING RESOURCES
All CFTC-registered prediction market platforms should be required to display a visible link or header directing users to problem gambling resources. Displaying the helpline (1-800-522-4700) or ncpgambling.org on account dashboards, deposit screens, etc. should be sufficient.
9. MARGIN TRADING
The Commission should prohibit baseline retail margin trading. Event contracts are binary - the full position is won or lost at settlement - meaning leverage can cause losses exceeding deposits, which is an unacceptable consumer harm.
Limited margin access should be earned through demonstrated financial stability - consistent deposits, responsible trading history, and no problem-gambling indicators - not a simple balance snapshot. Eligibility should require funding sourced exclusively from a verified, FDIC-insured traditional checking account. Payment applications such as Cash App, Venmo, and PayPal should be explicitly excluded, as these can represent borrowed or credit-based funds, obscuring the true source of capital and enabling a chain of debt regulators cannot adequately monitor. Institutional participants may operate under different standards appropriate to their regulatory obligations.
Thank you for the opportunity to comment.
Respectfully,
Wesley Atkinson
