Comment Text:
Dear Chairman and Commissioners,
My name is Jack West, and I'm a finance professional based in Texas. I'm writing to express my strong support for the proportionate regulation of prediction markets as outlined in the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). Though I'm relatively new to these markets, I believe they offer significant value to individuals, businesses, and society as a whole, and I urge the CFTC to craft rules that allow their growth under a sensible regulatory framework.
As someone working in finance, I see prediction markets as a powerful tool for generating information that often outpaces polls or pundits in accuracy. The aggregated wisdom of many participants produces forecasts that help with public decision-making and price discovery, something I find invaluable even just as an observer. Beyond that, these markets allow individuals and businesses to hedge real risks, like policy changes or economic shifts, in ways traditional financial instruments sometimes can't match. I also believe informed trading in these markets improves price discovery, benefiting everyone involved, not just traders.
I'm particularly concerned about the alternative to regulated markets. Platforms like Kalshi, operating under CFTC oversight, are far safer for consumers than unregulated offshore venues. Banning or over-restricting prediction markets won't eliminate demand; it will just push activity to less transparent, riskier spaces. If America prides itself on freedom, what legitimate reason is there to deny people the right to participate in legal, regulated markets? The demand is clear, and everyone benefits: jobs are created for firms like Kalshi, individuals and institutions can hedge risks, and we gain an incredible tool for measuring the likelihood of real-world outcomes.
I also want to address some specific questions from the ANPR. On Question 7, regarding public interest, I believe prediction markets serve a clear public good through better forecasting and risk management, and the CFTC should balance this with consumer protection through targeted rules, not bans. On Question 15, about defining gaming, I strongly argue that event contracts aren't gambling. They serve legitimate economic purposes like hedging and information aggregation, much like other derivatives I deal with in my work. And on Question 29, about inside information, I think the CFTC's existing tools to combat manipulation and insider trading are robust enough to handle these risks without broad prohibitions.
Finally, I believe the U.S. should lead in financial innovation, not cede ground to other countries. Academic research backs the value of prediction markets, and proportionate regulation can address specific concerns without stifling progress. I urge you to support well-regulated prediction markets that allow participation while using your existing authority to prevent abuse. Let's keep this innovative tool accessible and safe for Americans.
Sincerely,
Jack West
