Comment Text:
Dear Chairman and Commissioners,
My name is Kyle Heath, and I'm a trader and investor based in California. 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 your Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I believe these markets provide real value, both to me personally and to society, and I urge you to regulate them proportionately rather than impose overly restrictive rules or outright bans.
As someone who trades regularly, I see prediction markets as a unique tool for gaining insights that I can't find anywhere else. Whether it's forecasting election outcomes or other major public events, the aggregated information in these markets often proves more accurate than polls or pundits. This isn't just helpful for traders like me, its useful for anyone who wants a clearer picture of what might happen next. Beyond that, I use these markets to hedge personal financial risks. For instance, trading on election outcomes helps me offset potential policy changes that could impact my investments or taxes. This isn't gambling, it's a practical way to manage uncertainty, much like trading futures or options in traditional markets.
I also value the freedom to participate in legal, regulated platforms like Kalshi. These markets are safer and more transparent than unregulated offshore alternatives. If the CFTC over-restricts or bans prediction markets, I worry that activity will just move to less safe venues where theres no oversight. The U.S. should be leading in financial innovation, not ceding ground to other countries. The CFTC already has strong tools to tackle issues like manipulation and insider trading in other derivatives markets. I believe those same tools can work here without resorting to heavy-handed restrictions.
Regarding some of your specific questions, Id like to address Topic Area C, particularly Questions 15 and 16 on defining gaming versus legitimate markets. Event contracts are not gambling in my view. They serve real economic purposes like hedging and price discovery, just as other commodity or financial contracts do. Classifying them as gaming would be a mistake and could unfairly limit access to valuable tools. On Topic Area B, Question 7 about public interest, I think the balance tips toward innovation when markets are regulated properly, as platforms like Kalshi already are.
I understand concerns about potential abuse, but banning or over-restricting these markets punishes honest participants like me. Please focus on targeted rules to address specific risks while preserving access. I strongly support proportionate regulation of prediction markets to keep the U.S. at the forefront of financial innovation and ensure safe, transparent platforms for traders.
Thank you for considering my perspective.
Sincerely,
Kyle Heath
