Comment Text:
Dear Chairman and Commissioners,
My name is Adriel A., 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 I want to share why I strongly support 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 individuals like me, to businesses, and to society as a whole, and I urge the CFTC to regulate them proportionately rather than imposing broad bans or overly restrictive rules.
As a trader, I've seen firsthand how prediction markets offer insights you just can't get from polls or pundits. The prices reflect real-time, crowd-sourced information, and study after study shows they're often more accurate than traditional forecasts. This isn't just useful for those of us trading; it benefits everyone by providing clearer signals about future events. I also use these markets to hedge personal risks, like potential policy changes or economic shifts that could impact my investments. Businesses can do the same, whether it's a small firm hedging against regulatory uncertainty or an importer managing tariff risks. This isn't gambling. It takes research and judgment, just like trading stocks or commodities. Labeling event contracts as "gaming" ignores their legitimate economic purpose, and I hope the CFTC considers this when addressing Questions 15-22 on listed activities.
I'm also concerned about what happens if these markets are over-regulated or banned. I've traded on both regulated platforms like Kalshi, which operates under CFTC oversight, and unregulated offshore ones like Polymarket. The difference in safety and transparency is night and day. Pushing activity offshore by over-restricting here in the US would hurt traders like me and undermine consumer protection. The US should be leading in financial innovation, not ceding ground to other countries. I think this ties directly to Questions 7-14 on public interest, where the balance between innovation and protection is so critical.
On the issue of manipulation or insider trading, I believe the CFTC already has strong tools to handle bad actors. These issues aren't unique to prediction markets; they exist in stocks and futures too. Informed trading often improves price discovery, benefiting all participants, as long as it's not based on illegal nonpublic information. Banning or heavily restricting these markets to stop a few bad apples punishes everyone else. Targeted rules, not categorical bans, are the way to go. This relates to Questions 29-32 on inside information, and I encourage the CFTC to focus on enforcement of existing laws rather than broad prohibitions.
I appreciate the chance to comment on this issue. Prediction markets have real value for forecasting, hedging, and democratizing access to information. I urge the CFTC to support their growth with fair, proportionate regulation that keeps activity safe and onshore. Please don't let over-restriction push innovation and opportunity overseas.
Sincerely,
Adriel A.
