Comment Text:
Dear Chairman and Commissioners,
My name is James Hoffman, and I'm an everyday citizen from the United States who actively trades on prediction markets like Kalshi and Polymarket. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, published in the Federal Register as 91 FR 12516. I strongly support the idea of well-regulated prediction markets and want to share why I believe the CFTC should craft rules that allow these markets to thrive without pushing activity into riskier, unregulated spaces.
I've been trading on prediction markets for a while now, and I value the freedom to participate in legal, regulated platforms like Kalshi. These markets aren't just a hobby for me; they give me a way to engage with real-world events and make informed decisions based on research and analysis. I believe that allowing regular people like me to take part isn't just fair, it also makes the market's predictions more accurate by bringing in diverse perspectives. This ties directly to your questions under Topic E, specifically Question 29, about whether informed traders help with price discovery. From my experience, they absolutely do. When people bring their knowledge to the table, the prices reflect a clearer picture of what's likely to happen, and that benefits everyone, not just those trading.
I'm worried, though, about what happens if the CFTC over-restricts or bans these markets. I've seen firsthand how easy it is to access offshore platforms like Polymarket, which aren't under U.S. oversight. If regulated options disappear, people won't stop trading; they'll just move to these less safe venues where there's no consumer protection. This relates to your questions under Topic B, like Question 7 on balancing innovation and consumer protection. I think regulated markets are the answer, not bans. They keep activity under the CFTC's watch and protect users like me from fraud or manipulation.
On top of that, I believe the U.S. should be a leader in financial innovation. We're at risk of falling behind if we stifle prediction markets while other countries embrace them. This connects to the broader public interest discussion in Topic B, Question 8, about the role of innovation. Let's not cede this space to others; let's set the global standard with smart, proportionate rules.
I acknowledge there are concerns about manipulation or insider trading, as raised in Topic E. But those issues are already illegal, and the CFTC has tools to address them. Banning or over-restricting prediction markets punishes honest participants like me instead of targeting bad actors. I urge you to focus on enforcing existing laws rather than limiting access.
In closing, I ask the CFTC to support proportionate regulation of prediction markets. Allow legal, regulated platforms to operate and grow while using your authority to prevent abuse. Don't push activity offshore by over-restricting. Thank you for considering my perspective.
Sincerely,
James Hoffman
