Comment Text:
Dear Chairman and Commissioners,
My name is Jason Abrahams, and I'm a trader and investor based in Florida. I'm writing to express my strong support for the proportionate regulation of prediction markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've been using these markets for hedging and risk management, and I believe they provide real economic value that shouldn't be stifled by overly restrictive rules.
Prediction markets aren't just a hobby for me; they're a critical tool for offsetting risks to my business. For example, I trade on platforms like Kalshi to hedge against abrupt policy shifts or erratic decision-making from political figures like former President Trump. His sudden reversals on trade or regulatory issues have caused real dislocations in markets that affect my investments and business planning. Being able to hedge against those unpredictable outcomes has saved me from significant losses. This isn't gambling. It's a calculated way to manage uncertainty, much like how I use other derivatives to protect against commodity price swings or interest rate changes. I urge you to recognize that event contracts serve legitimate economic purposes, as you discuss in Questions 15-22 around defining gaming versus valid market activity.
I also believe the U.S. should be a leader in financial innovation. If we over-regulate or ban prediction markets, we're just pushing this activity to offshore platforms with no oversight. That doesn't protect anyone; it just cedes the future of this technology to other countries. I'd rather see the CFTC create a framework that keeps these markets safe and transparent here at home. Your questions in Topic Area B, especially Question 7 on balancing innovation and consumer protection, get at this tension. My view is simple: regulate to address real risks like manipulation or insider trading, but don't kill the market in the process.
I'm not blind to the concerns about misuse. I get that insider trading or manipulation could be issues, as you raise in Questions 29-32. But those are already illegal under existing laws, and the CFTC has the tools to enforce them. Shutting down or overly restricting prediction markets punishes honest traders like me who use them for real hedging purposes. Focus on targeted rules for bad actors, not broad bans.
In short, I ask that the CFTC support a regulatory approach that allows prediction markets to thrive while addressing specific risks. These markets help individuals and businesses like mine manage real financial exposure, and they keep the U.S. at the forefront of financial innovation. Please don't let overcaution derail a tool that benefits so many.
Sincerely,
Jason Abrahams
