Comment Text:
Dear Chairman and Commissioners,
My name is Melvin Sanders, and I'm a trader and investor from Tennessee. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I strongly support the development of well-regulated prediction markets, and I want to share why they matter to me and why I believe the CFTC should regulate them proportionately rather than impose broad restrictions.
As a trader, I've seen firsthand how prediction markets provide information that's just not available elsewhere. Their forecasts often beat polls or pundits by a wide margin, and that benefits everyone, not just those of us trading. I use these markets to hedge real financial risks in my personal and business life, like protecting against policy changes or economic shifts that could impact my investments. This isn't gambling. It takes research and judgment, much like trading stocks or commodities. Labeling event contracts as "gaming" ignores their legitimate economic purpose, and I urge the CFTC to recognize this distinction when addressing questions like 15 through 22 on listed activities.
I also believe the U.S. should be a leader in financial innovation. If we over-regulate or ban these markets, we're just handing the advantage to other countries while pushing activity to unregulated offshore platforms. I've traded on regulated platforms like Kalshi, and I know consumer protection comes from oversight, not prohibition. Let's keep these markets here, under CFTC supervision, rather than driving them underground. This ties directly to questions 7 through 14 on balancing innovation and public interest, where I think regulation can achieve both.
On the topic of informed trading, addressed in questions 29 to 32, I believe traders with good information improve price discovery for everyone. Banning markets because of potential insider trading punishes honest participants like me. The CFTC already has tools to tackle manipulation and insider trading; use those instead of broad bans. And one more thing, if I predict correctly on most contracts, I shouldn't lose everything over a small technicality. Earnings from accurate predictions should be honored.
Academic research backs this up too. Studies show prediction markets aggregate information efficiently, and I think the CFTC should consider this data when weighing costs and benefits in questions 33 to 40. I'm asking for proportionate, targeted rules that address specific risks without shutting down an entire market that helps people like me manage uncertainty.
Thank you for considering my input. I urge you to support the growth of regulated prediction markets in a fair and balanced way.
Sincerely,
Melvin Sanders
