Comment Text:
Dear Chairman and Commissioners,
My name is Alejandro Jimenez, and I'm a trader and investor from Virginia. By trade, I'm a spectrum engineer, which means I spend a lot of time analyzing data and predicting trends in complex systems. I actively trade on prediction markets like Kalshi, and Im writing to support well-regulated prediction markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets are valuable tools for individuals like me, and for society as a whole, if regulated thoughtfully.
As someone who deals with uncertainty in my work, I see firsthand how prediction markets offer unique insights. They help me hedge real risks that impact my finances, like economic policy shifts or election outcomes that could affect taxes and regulations. I've used platforms like Kalshi to make informed trades based on research and judgment, not luck. This isn't gambling. It's a tool for managing uncertainty, much like futures or options markets. I believe many others, from small business owners to everyday investors, could benefit from this kind of hedging if access remains open.
What concerns me most is U.S. competitiveness in financial innovation. Prediction markets are a cutting-edge tool, and the U.S. should be leading the way, not falling behind. If we over-restrict or ban these markets, activity will just move to unregulated offshore platforms. I've seen some of those sites, and they lack the transparency and safeguards of a regulated market like Kalshi under CFTC oversight. Banning or stifling these markets here doesn't stop them; it just pushes people like me to riskier, less accountable venues. Thats a loss for consumer protection and for American innovation.
I appreciate the CFTC's concern about risks like manipulation or insider trading, as outlined in your questions on core principles (Questions 1-6) and inside information (Questions 29-32). But the answer isn't broad categorical bans. It's targeted, proportionate regulation. The CFTC already has strong tools to combat manipulation and fraud in other derivatives markets. Adapt those for event contracts. Don't punish the majority of honest traders for the actions of a few bad actors.
I also want to address the public interest considerations in Questions 7-14. Prediction markets aren't just about trading; they aggregate information in ways that benefit everyone. They often predict outcomes better than polls or pundits. Keeping these markets regulated and accessible in the U.S. ensures that benefit stays here, rather than ceding it to other countries.
In closing, I urge the CFTC to support proportionate regulation of prediction markets. Don't ban or overly restrict them. Focus on specific risks with targeted rules, and keep the U.S. at the forefront of financial innovation. Thank you for considering my perspective.
Sincerely,
Alejandro Jimenez
