Comment Text:
Dear Chairman and Commissioners,
My name is Michael Butler, and I'm a trader and investor based in Washington state. I'm 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've been actively trading on platforms like Kalshi and Polymarket for years, and I deeply value the opportunities these markets provide, especially in an uncertain global economy where a reliable income can be hard to come by.
From the first day I started using Kalshi, I saw it as an alternative investment product with huge potential. It's not just a hobby; it's a way for me to hedge real risks and make informed financial decisions. For instance, I've used these markets to offset uncertainties tied to economic events like interest rate changes that impact my investments. This isn't gambling, it's a legitimate tool for managing risk, much like traditional futures or options. I've learned a lot through this process, and I'm still learning every day, steadily growing my skills as a trader. I believe prediction markets also serve a broader purpose by aggregating information and producing prices that reflect real probabilities, often more accurately than polls or pundits. This benefits everyone, not just those of us who trade.
That said, I understand there are concerns about certain types of contracts. On personal ethical grounds, I wouldn't touch sports trades on any platform or contracts tied to something like the capture of a foreign leader. But I don't think the answer is broad bans on entire categories. Targeted, proportionate regulation makes more sense to address specific risks without punishing everyone. I also want to stress that regulated markets like Kalshi are far safer than unregulated offshore alternatives. If you over-restrict or ban these markets, activity will just move to less transparent platforms where consumer protections are nonexistent. I'd much rather see the CFTC focus on strong oversight here in the US, keeping us competitive in financial innovation.
Regarding some of your specific questions, like those in Topic B on public interest (Questions 7-14), I believe prediction markets strike a balance between innovation and protection when regulated properly. They help with price discovery and risk management for individuals like me. And on Topic E about inside information (Questions 29-32), I think informed trading actually improves market accuracy, as long as existing laws against insider trading are enforced. The CFTC already has tools to tackle manipulation; use them instead of sweeping prohibitions.
I urge you to support proportionate regulation of prediction markets. Don't let over-restriction push participants like me to riskier, offshore options. Keep these markets accessible, safe, and innovative under your oversight.
Sincerely,
Michael Butler
