Comment Text:
Dear Chairman and Commissioners,
My name is Tyler Jermann, and I'm a trader and investor based in Minnesota. 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 create a balanced framework that allows them to thrive.
As someone who trades regularly, Ive seen firsthand how prediction markets offer unique information you cant get from polls or pundits. The prices reflect real-time collective judgment, often more accurate than so-called experts. Ive used these markets to hedge personal financial risks, like betting on election outcomes that could impact my taxes or business regulations that affect my investments. This isnt gambling. Its a thoughtful process of research and analysis, much like trading stocks or commodities. Classifying event contracts as gaming feels like a misstep to me, as they serve genuine economic purposes like price discovery and risk management.
Im also concerned about consumer protection, which is why I strongly prefer trading on regulated platforms like Kalshi over unregulated offshore alternatives. If the CFTC bans or over-restricts these markets, people like me will be pushed to less safe venues with no oversight. Regulation is the answer, not prohibition. The CFTC already has solid tools to tackle manipulation and insider trading in other derivatives markets. I believe those can be applied here without reinventing the wheel. Plus, informed trading actually helps improve price discovery, benefiting everyone in the market, not just the traders.
On a broader level, I think the U.S. needs to lead in financial innovation. We shouldnt cede this space to other countries by over-regulating or stifling growth. Academic research backs this up, showing how prediction markets aggregate information efficiently. That transparency is a public good. Id urge the CFTC to consider these points, especially in response to questions 7 and 8 on balancing innovation with consumer protection, and questions 15 and 16 on defining gaming versus legitimate economic activity.
I understand there are risks, like potential insider trading or manipulation, but shutting down entire markets to stop a few bad actors punishes honest participants like me. Lets focus on targeted rules that address specific issues while keeping these markets accessible. I ask the CFTC to support proportionate regulation of prediction markets and avoid broad bans or overly restrictive policies that could harm innovation and push activity offshore.
Thank you for considering my perspective.
Sincerely,
Tyler Jermann
