Comment Text:
Dear Chairman and Commissioners,
My name is Mike Powell, and I'm a trader and investor based in Texas. 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 been actively trading on platforms like Kalshi for a while now, and I strongly support the CFTC developing fair and proportionate regulations for these markets rather than imposing heavy restrictions or outright bans.
As someone who spends a lot of time analyzing markets, I can tell you that prediction markets offer something unique. They produce forecasts that are often more accurate than polls or pundits. I've seen this firsthand on Kalshi, where the collective wisdom of traders cuts through the noise of opinion pieces or biased surveys. This isn't just helpful for people like me who trade; it's valuable information for the public, businesses, and even policymakers who need reliable data to make decisions. I believe fostering these markets under proper oversight can improve price discovery and decision-making for everyone.
I also want to stress that regulated platforms like Kalshi are far safer than the alternative. If the CFTC over-restricts or bans event contracts, people won't just stop trading. They'll move to unregulated offshore platforms with no oversight, no consumer protections, and no accountability. I've looked at some of those sites, and they're a mess. Keeping these markets under CFTC supervision ensures transparency and reduces risks for traders like me. It's the practical choice.
Another concern I have is the idea of classifying event contracts as gambling. That doesn't sit right with me. Trading on prediction markets isn't a game of chance; it requires research, analysis, and judgment about real-world events. I put in the same kind of effort I do when trading stocks or commodities. These contracts serve legitimate economic purposes, like hedging against uncertainty or gaining insight into future events. Calling this gaming feels like a misstep, and I urge the CFTC to recognize the real value here.
Looking at some of the specific questions in the ANPR, I want to address a couple from the Public Interest and Listed Activities sections. On Question 7, about balancing innovation and consumer protection, I think regulation should focus on transparency and anti-manipulation measures, not blanket prohibitions. And on Question 15, regarding defining gaming versus legitimate markets, I believe the economic purpose and research-driven nature of event contracts clearly set them apart from gambling.
I appreciate the CFTC taking the time to gather public input on this. My ask is simple: please support proportionate regulation of prediction markets. Don't let over-restrictive rules or broad bans push this valuable tool into the shadows. Regulate them fairly, keep them safe, and let traders like me continue to participate in legal, overseen markets.
Sincerely,
Mike Powell
