Comment Text:
Dear Chairman and Commissioners,
My name is Terence A Lobo, and I'm a trader and investor from the United States. 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 the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to individuals like me, as well as to society at large, and I urge the CFTC to craft proportionate regulations rather than impose bans or overly restrictive rules.
As a trader, Ive seen firsthand how prediction markets offer information you cant get elsewhere. Their forecasts on elections and public events consistently beat polls and pundits. Ive relied on these platforms to make sense of complex events, like predicting election outcomes that could impact my investments. Beyond personal use, this accuracy benefits everyone, from journalists to policymakers, by providing a clearer picture of whats likely to happen. These markets arent just games; they aggregate real-world knowledge in a way nothing else does.
I also use prediction markets to hedge financial risks. For instance, Ive traded contracts tied to economic indicators that affect my portfolio, like interest rate decisions. This isnt gambling. Its a practical tool, no different from using futures to hedge commodity prices. Event contracts serve a real economic purpose, and labeling them as gaming ignores their utility. Im confident the CFTC sees this distinction, and I encourage you to reflect it in your rules, especially when addressing questions 15-22 on defining legitimate markets versus gaming.
On the topic of regulation, I strongly believe regulated platforms like Kalshi are far safer than unregulated offshore ones. If the CFTC over-restricts or bans these markets, traders like me will be pushed to less transparent venues with no oversight. Thats a worse outcome for everyone. The US should lead in financial innovation, not cede ground to other countries. The CFTC already has robust tools to tackle manipulation and insider trading, as discussed in questions 1-6 and 29-32. Use those tools instead of broad prohibitions. Targeted rules can address bad actors without punishing the rest of us.
Im also a big believer in data transparency and academic research around prediction markets. Studies have shown theyre powerful for forecasting, and this data should be accessible for public benefit. In response to questions 7-14 on public interest, I think balancing innovation with consumer protection means supporting these markets under clear, fair rules.
Prediction markets are a net positive. They help me hedge risks, provide unmatched forecasting, and democratize access to valuable information. I respectfully ask the CFTC to regulate them proportionately, ensuring the US remains a leader in financial innovation while keeping markets safe and fair. Please dont ban or over-restrict them.
Thank you for considering my input.
Sincerely,
Terence A Lobo
