Comment Text:
Dear Chairman and Commissioners,
My name is Simon Gerszberg, and I'm a business owner from New York. I run a small company here, and Ive been actively trading on prediction markets like Kalshi and Polymarket for a while now. I'm writing to support well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets are valuable for people like me and for society as a whole, and I urge the CFTC to regulate them proportionately rather than banning or overly restricting them.
As a business owner, I deal with uncertainty every day, whether it's policy changes, economic shifts, or even local regulations that could impact my operations. Prediction markets give me a way to hedge against some of that uncertainty. They're not just a game or a hobby. They're a tool. Ive used them to gauge risks around election outcomes that could affect my taxes or supply chain costs. The prices on these platforms often provide better information than polls or news pundits, and that helps me make smarter decisions. I know academic research, like studies by economists such as Justin Wolfers, backs this up. Prediction markets aggregate information in ways that are uniquely accurate, and that benefits everyone, not just traders.
I also want to stress that these markets are not gambling. Trading on them takes real research and judgment, just like investing in stocks or futures. I spend time analyzing data and trends before placing a trade. Calling this "gaming" feels like a misunderstanding of the economic purpose behind event contracts. Theyre about price discovery and risk management, not rolling dice. On this point, I think Question 15 from your ANPR, about defining gaming versus legitimate markets, is critical. I hope the CFTC recognizes that event contracts serve real economic needs and shouldnt be lumped in with gambling.
One big concern I have is that banning or over-restricting these markets will just push activity offshore to unregulated platforms. Id much rather trade on a CFTC-regulated market like Kalshi, where there are safeguards and transparency, than be forced to use some sketchy overseas site with no oversight. If the U.S. cracks down too hard, regular folks like me lose access to safe, legal markets, and the activity doesnt disappear, it just goes where the CFTC cant touch it. I think Question 7, about balancing innovation and consumer protection, gets at this. Regulation should keep us safe without killing off a useful tool.
I know there are worries about insider trading or manipulation, and those are valid. But the answer isnt to shut down prediction markets. Those behaviors are already illegal, and the CFTC has the power to enforce against them. Dont punish everyone for the actions of a few bad actors. I strongly urge you to support proportionate rules that allow prediction markets to thrive while addressing specific risks with targeted oversight.
Thank you for considering my perspective.
Sincerely,
Simon Gerszberg
