Comment Text:
Dear Chairman and Commissioners,
My name is Xavier Ayala, and I'm a trader and investor from Wisconsin. I've been actively trading on prediction markets like Kalshi for a while now, and 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 believe these markets provide real value to people like me, and I want to share why I think the CFTC should regulate them proportionately rather than imposing broad restrictions or bans.
As someone who trades regularly, I see prediction markets as a unique tool. They're not just a way to make a profit; they give me insights I can't find anywhere else. Whether it's an election outcome affecting my investments or a Federal Reserve decision impacting my financial planning, these markets help me hedge real risks in my life. This isn't gambling. It takes research and judgment, just like trading stocks or commodities. Classifying event contracts as "gaming," as discussed in Questions 15-22, ignores their legitimate economic purpose. They're a form of price discovery and risk management, not a lottery ticket.
I'm also concerned about what happens if these markets are over-restricted or banned. I've seen unregulated offshore platforms out there, and they're far riskier than a regulated market like Kalshi. If the CFTC cracks down too hard, people like me will get pushed to those unsafe venues. Regulation, not prohibition, is the answer to consumer protection, as raised in Questions 7-14 about balancing innovation and safety. Keep us in a system with oversight and transparency, where the CFTC can step in if something goes wrong.
Another point I care about is the role of informed trading. I believe traders with good information make these markets more accurate, which benefits everyone, not just those trading. This ties into Questions 29-32 on inside information. Yes, insider trading is a concern, but it's already illegal, and the CFTC has tools to address it. Banning or over-restricting markets to stop a few bad actors punishes the rest of us and kills the value these platforms create.
I urge the CFTC to focus on targeted, proportionate rules instead of broad categorical bans. Address specific risks like manipulation or insider trading with the authority you already have, rather than shutting down entire categories of contracts. The US should be a leader in financial innovation, not drive it offshore. I strongly support regulated prediction markets and ask that you craft rules that protect consumers while preserving our freedom to participate in these valuable, legal markets.
Thank you for considering my perspective.
Sincerely,
Xavier Ayala
