Comment Text:
Dear Chairman and Commissioners,
My name is Jacob Alvarez, and I'm a finance professional based in California. I'm writing to provide my input 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. I believe these markets provide real value, both to individuals like me and to the broader economy, and I want to share why I think the CFTC should focus on regulating them effectively rather than restricting access.
As someone working in finance, I see prediction markets as a unique tool for gaining insights that aren't available through traditional sources. The aggregated wisdom of many participants often beats expert opinions or polls when it comes to forecasting events like elections or economic shifts. I've personally used platforms like Kalshi to make small trades on outcomes that affect my financial planning, and I value having access to a legal, regulated space to do so. What worries me is that if the CFTC over-restricts or bans these markets, activity will just move to unregulated offshore platforms where there are no consumer protections at all. I've seen firsthand how offshore markets operate in other financial contexts, and they often lack transparency or accountability. Keeping prediction markets under CFTC oversight, like with Kalshi, is far safer for everyone involved.
I also want to stress that event contracts aren't gambling in my view. They serve legitimate economic purposes, like hedging against uncertainty or informing decision-making. When I trade on a prediction market, I'm not rolling dice; I'm researching and making informed judgments, just as I would with stocks or futures. Classifying these contracts as "gaming" would be a mistake and could stifle a valuable financial tool. This ties into a broader point: the US should be a leader in financial innovation. If we clamp down too hard, we risk ceding this space to other countries that are more willing to embrace new ideas.
Looking at some of the specific questions in the ANPR, I want to address Question 8 under Public Interest. I believe the CFTC can balance innovation and consumer protection by focusing on strong oversight rather than broad prohibitions. And on Question 15 under Listed Activities, I urge you not to treat event contracts as gaming but to recognize their role in price discovery and risk management. My ask is simple. Please support proportionate regulation of prediction markets. Don't ban or over-restrict them, as that would push participants like me toward less safe alternatives and hurt the US's position as a financial leader.
Thank you for considering my perspective.
Sincerely,
Jacob Alvarez
