Comment Text:
Dear Chairman and Commissioners,
My name is Jesse Phipps, and I'm a trader and investor based in Texas. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to express my strong support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide real value to people like me and to society as a whole, and I hope the CFTC will craft rules that encourage innovation while protecting consumers.
As a trader, Ive seen firsthand how prediction markets offer information you cant get anywhere else. Their forecasts on elections and public events consistently beat polls and pundits. That accuracy isnt just helpful for traders; its valuable for anyone making decisions, from business owners to regular folks trying to plan ahead. Ive also used these markets to hedge personal financial risks tied to things like policy changes or economic data releases. For example, Ive traded contracts tied to interest rate decisions to offset risks related to my investments. This isnt gambling. Its a practical tool, much like trading stocks or commodities, grounded in research and real-world judgment.
Im also concerned about what happens if these markets get over-restricted or banned. Right now, platforms like Kalshi operate under CFTC oversight, which keeps things transparent and safe. If you clamp down too hard, people will just move to unregulated offshore platforms where theres no protection at all. Id much rather see the U.S. lead in financial innovation and set the standard for how these markets should work, rather than cede that ground to other countries. Plus, the CFTC already has strong tools to tackle issues like manipulation and insider trading. Use those existing powers instead of broad bans that punish everyone.
On specific points from your ANPR, Id like to address a few questions. Regarding Public Interest (Questions 7-14), I believe prediction markets serve the public good through price discovery and better decision-making data. Informed trading actually improves accuracy, benefiting all participants. On Listed Activities (Questions 15-22), I urge you not to classify event contracts as gaming. They have legitimate economic purposes like hedging and forecasting, distinct from gambling. And on Inside Information (Questions 29-32), I think the focus should be on enforcing existing laws against insider trading, not restricting entire markets.
I understand there are risks to manage, like potential manipulation. But proportionate, targeted regulation can address those without throwing out the benefits. Dont let a few bad actors ruin a system that works for so many. I respectfully ask the CFTC to support well-regulated prediction markets and avoid overly restrictive rules or categorical bans.
Thank you for considering my input.
Sincerely,
Jesse Phipps
