Comment Text:
Dear Chairman and Commissioners,
My name is Drew Stoller, and I'm writing from Nebraska to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've been actively trading on platforms like Kalshi, and while I have serious concerns about how these markets operate, I still believe they should be regulated rather than banned.
To be upfront, I think prediction markets are essentially gambling. Calling them "markets" or talking about "shares" doesn't change the fact that you're just betting on outcomes, whether it's a sports spread or an election result. I've said things like "I own a share in 'yes' on this event," and it feels ridiculous to pretend that's investing. There's no broader financial purpose here, and honestly, the way odds are calculated often feels like a scam. I'm even part of a class action lawsuit against Kalshi because I didn't fully grasp the mechanics when I started trading, and I felt misled. I hope we win, and I hope it forces these platforms to be more transparent. But even with all that, I don't support banning prediction markets outright.
Here's why: I believe in the freedom to participate in legal, regulated markets. If people want to enter into a straightforward agreement with a company offering a service, that's a cornerstone of our capitalist economy. Banning these platforms would infringe on personal choice and push activity to unregulated, offshore sites where there's even less oversight. I've made my share of mistakes on Kalshi, but I'd rather deal with a regulated U.S. company than some shady overseas operation. Regulation can address the problems without throwing out the whole concept.
I also think the U.S. should lead in financial innovation. If we over-restrict or ban prediction markets, we're just handing the future of this industry to other countries. We have the chance to set the standard, create safe and transparent rules, and keep the economic benefits here at home. I'm particularly drawn to questions 7 and 33 from your ANPR, about balancing innovation with consumer protection and how to classify these contracts. I urge you to focus on strong, clear regulations that protect users like me from deceptive practices while still allowing these markets to exist and grow.
I'm not blind to the risks. Manipulation and insider trading are real concerns, but the CFTC already has tools to tackle those in other markets. Use them here too. Don't punish everyone by shutting down prediction markets because of a few bad actors. I ask that you support proportionate regulation that preserves our freedom to participate while addressing the very real flaws in how these platforms operate.
Thank you for considering my perspective.
Sincerely,
Drew Stoller
