Comment Text:
Dear Chairman and Commissioners,
My name is Jere Ford, and I'm a trader and investor based in California. I've been involved in various financial markets for years, and I've used prediction markets a few times to inform my decisions and manage risks. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my strong support for well-regulated prediction markets in the United States.
As someone who relies on accurate information to make investment choices, Ive seen firsthand how prediction markets offer insights that polls and pundits often miss. I remember during the last election cycle, the market prices on platforms like Kalshi were closer to the actual outcome than any survey I read. That kind of forecasting power isn't just useful for traders like me; it helps everyone, from journalists to policymakers, get a clearer picture of what's likely to happen. Beyond elections, these markets help with price discovery for all sorts of public events, which is critical for making informed decisions in an uncertain world.
I also value prediction markets for hedging personal and business risks. As an investor, I face exposure to political and economic shifts, whether it's a policy change affecting my portfolio or a Federal Reserve decision impacting interest rates. Being able to hedge against these outcomes through event contracts gives me a practical tool to manage uncertainty. This isn't gambling, in my view. It takes research and judgment, just like any other investment I make. Treating these contracts as gaming would be a misstep, since they serve real economic purposes like risk management and information aggregation.
Im also concerned about access and fairness. If prediction markets are over-restricted or banned, regular people like me lose out while activity gets pushed to unregulated offshore platforms. I've looked at some of those sites, and they lack the transparency and safeguards of a CFTC-registered market like Kalshi. Regulation here in the US, with proper consumer protections, is the way to go. It keeps participants safe and ensures the US stays competitive in financial innovation instead of ceding ground to other countries.
Addressing some of your specific questions, like those in Topic Area B on public interest (Questions 7-14), I believe prediction markets balance innovation with consumer protection when regulated properly. They provide unique benefits like better forecasting and risk hedging that outweigh the risks, especially since the CFTC already has tools to tackle manipulation and insider trading. On Topic Area C (Questions 15-22), I urge you not to classify these contracts as gaming, as their economic value is clear to anyone who uses them.
I ask that the CFTC support proportionate regulation of prediction markets. Please don't impose broad bans or overly restrictive rules that would limit access for everyday investors like me. Focus on targeted measures to address specific risks while preserving the benefits these markets bring to society.
Thank you for considering my input.
Sincerely,
Jere Ford
