Comment Text:
Dear Chairman and Commissioners,
My name is Kafat Arguedas, and I'm a trader and investor from Utah. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to support the proportionate regulation of these markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I believe these markets provide real value to individuals like me, businesses, and society as a whole, and I urge the CFTC to regulate them in a way that fosters innovation while addressing specific risks.
As a trader, I've seen firsthand how prediction markets offer information you can't find anywhere else. Their forecasts on elections, economic indicators, and public events consistently outperform polls and pundits. This isn't just useful for those of us trading; it helps everyone by providing clearer signals for decision-making. I also use these markets to hedge personal financial risks, like potential tax changes tied to election outcomes or interest rate decisions that impact my investments. This isn't gambling. It takes research and judgment, much like trading stocks or commodities. Classifying event contracts as "gaming," as discussed in Questions 15-22, overlooks their legitimate economic purpose, and I strongly oppose such a label.
Im also concerned about what happens if these markets are over-restricted or banned. I've traded on regulated platforms like Kalshi, and I know theyre safer than the unregulated offshore alternatives out there. If the CFTC imposes broad categorical bans instead of targeted rules, as raised in Questions 23-28, activity will just move to less safe venues. That hurts consumer protection, not helps it. The U.S. should be leading in financial innovation, not ceding ground to other countries. Regulated markets keep us competitive and ensure transparency.
On the issue of manipulation and insider trading, brought up in Questions 29-32, I believe the CFTC already has strong tools to address bad actors. Banning entire markets to stop a few cheats punishes honest participants like me. Plus, informed trading often improves price discovery, benefiting everyone. Academic research backs this up, showing how prediction markets aggregate information efficiently. Rather than broad restrictions, I urge targeted regulations to handle specific risks without stifling the benefits.
Prediction markets democratize access to valuable information and give people a stake in understanding the world around them. I ask the CFTC to support their growth with balanced rules that protect consumers while preserving freedom to participate in legal, regulated markets. Let's keep the U.S. at the forefront of financial innovation.
Thank you for considering my input.
Sincerely,
Kafat Arguedas
