Comment Text:
Dear Chairman and Commissioners,
My name is Maxwell McCaffrey, and Im a trader and investor based in New York. Ive been actively trading on prediction markets like Kalshi for a while now, and Im writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I strongly support the development of well-regulated prediction markets and want to share why I believe they are valuable, both for me personally and for society as a whole.
As someone who trades regularly, Ive seen firsthand how prediction markets provide unique information that you just cant get from polls or pundits. Ive used Kalshi to gauge probabilities on everything from election outcomes to economic indicators, and the forecasts are often sharper than what I see in the news. This isnt just helpful for traders like me; its a public good when better information is out there for everyone. I also believe that allowing regular people like me to participate makes these markets stronger. If only big institutions could trade, the insights would stay locked up with them. Democratized access isnt a flaw, its a strength.
I want to address a concern I know the CFTC has, especially around whether event contracts are gambling. I dont see it that way at all. Trading on Kalshi takes research, analysis, and real-world judgment, much like trading stocks or futures. These contracts serve legitimate economic purposes, like hedging risks or discovering prices. Classifying them as gaming, as discussed in Questions 15-22 of the ANPR, misses their real value. I use these markets to manage uncertainty that affects my investments, and thats not a game, its a serious tool.
Another worry Ive seen raised is about manipulation or insider trading, as covered in Questions 29-32. I get why thats a concern, but the CFTC already has strong tools to tackle fraud and manipulation in other markets. Those same tools can work here. Plus, informed trading often improves price discovery, which benefits everyone. Banning or over-restricting these markets, as opposed to using existing enforcement powers, would likely push activity to unregulated offshore platforms. Id much rather trade on a regulated market like Kalshi, where theres oversight, than take my chances somewhere with no rules.
Im all for freedom to participate in legal, regulated markets. The U.S. should be a leader in financial innovation, not driving it overseas. So, in response to Questions 7-14 on public interest, I urge you to balance consumer protection with the need to foster useful tools like prediction markets. Dont let the fear of a few bad actors punish the rest of us who trade responsibly.
Thank you for considering my input. I ask that the CFTC support proportionate regulation of prediction markets and avoid bans or overly restrictive rules that could harm their potential.
Sincerely,
Maxwell McCaffrey
