Comment Text:
Dear Chairman and Commissioners,
My name is Henry Felgenhauer, and I'm a student from Illinois with a strong interest in economics and public policy. I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I believe that prediction markets, when properly regulated, offer tremendous value to individuals like me and to society as a whole, and I urge the CFTC to support their growth with balanced, proportionate rules rather than restrictive bans.
As a student, Ive followed prediction markets closely, especially for their ability to forecast elections and other public events more accurately than traditional polls or pundits. Ive seen firsthand how platforms like Kalshi provide insights that cut through the noise of opinion pieces and biased reporting. These markets aggregate real information from real people risking their own money, and the resulting prices often predict outcomes better than any survey. This isnt just useful for traders; it helps everyone, from journalists to policymakers, make sense of complex events.
I also use prediction markets for personal hedging and risk management. For instance, Ive traded on contracts tied to economic indicators that could impact my future job prospects or student loan costs. Having the freedom to participate in these legal, regulated markets gives me a small but meaningful way to protect myself against uncertainty. Banning or over-restricting these markets would take that tool away from ordinary people like me, likely pushing activity to unregulated offshore platforms that lack oversight. I strongly believe that regulated markets under the CFTCs watch, like Kalshi, are far safer and more transparent than the alternatives.
Im also concerned about maintaining U.S. competitiveness in financial innovation. If we stifle prediction markets with heavy-handed rules, we risk ceding leadership to other countries that embrace these tools. On a related note, I think the CFTC already has robust mechanisms to address concerns like manipulation and insider trading in other derivatives markets. These tools can be adapted here without resorting to broad prohibitions. In fact, informed trading in prediction markets often improves price discovery, benefiting all participants by making the markets signals clearer and more reliable.
Id like to address a few specific questions from the ANPR. Regarding Question 7 on balancing innovation and consumer protection, I believe the CFTC should prioritize rules that encourage safe participation over outright bans. On Question 29 about inside information, I think informed traders often enhance market accuracy, and existing laws already prohibit misuse of nonpublic information by federal officials or others. Lets enforce those, not punish everyone.
In closing, I ask the CFTC to support the growth of prediction markets with fair, targeted regulation. These markets provide unique value through accurate forecasting, risk management, and democratic access. Please dont let fear of a few bad actors limit this potential for the rest of us.
Sincerely,
Henry Felgenhauer
