Comment Text:
Dear Chairman and Commissioners,
My name is Raghav Sharma, and I'm a software engineer based in Texas. I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've used prediction markets a few times myself, and I strongly support their continued operation under fair, proportionate regulation by the CFTC.
As someone working in tech, I value tools that provide better data for decision-making, and prediction markets do exactly that. I've seen firsthand how their forecasts often beat out polls or pundits when it comes to predicting election outcomes or economic trends. That kind of information isn't just useful for traders like me; it helps the public and even policymakers make sense of complex events. I also appreciate the freedom to participate in these legal, regulated markets. Platforms like Kalshi, operating under CFTC oversight, are a much safer bet than unregulated offshore sites. If we push these markets underground with overly strict rules, we lose that safety net.
I also want to stress that event contracts aren't gambling. They serve real economic purposes. For instance, I've used prediction markets to hedge against uncertainties that could impact my personal finances, like potential policy changes affecting tech regulations or tax rates. Businesses do this too, whether it's a startup hedging against interest rate shifts or a retailer managing risks tied to trade policies. This isn't a game; it's a practical tool. Labeling it as "gaming" ignores the research and judgment that go into trading, much like any other investment.
I'm aware of concerns about manipulation or insider trading, but the CFTC already has strong tools to tackle those issues. You've got the authority to go after bad actors in any regulated market, and those powers should be enough here too. Plus, informed trading often improves price discovery, which benefits everyone by making the market's predictions more accurate. Banning or over-restricting these markets to stop a few bad apples would hurt the rest of us who use them responsibly.
Id like to address a couple of specific questions from the ANPR. On Question 7, regarding public interest, I believe prediction markets clearly serve the public by offering unique insights and risk management tools. And on Question 15, about defining gaming versus legitimate markets, I urge you to recognize event contracts as distinct from gambling due to their economic utility.
In closing, I ask the CFTC to support proportionate regulation of prediction markets. Don't ban or overly restrict them. Focus on targeted rules to address specific risks while preserving access for everyday people like me. Thank you for considering my input.
Sincerely,
Raghav Sharma
