Comment Text:
Dear Chairman and Commissioners,
My name is Kenna Huot, and I'm a student from Minnesota writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I've used prediction markets a few times, and I believe they have real value, both for me personally and for society. I'm asking you to support proportionate regulation of these markets rather than imposing heavy restrictions or outright bans.
As a student, I value the freedom to participate in legal, regulated markets. Prediction markets aren't just a game to me; they're a way to engage with real-world events and test my understanding of complex issues. I've placed small trades on platforms like Kalshi, and doing so has made me think harder about politics, economics, and even weather patterns. It's not gambling. It takes research and judgment, much like any other kind of investing. Classifying event contracts as "gaming" feels wrong when they serve legitimate purposes like price discovery and hedging. I urge you to consider this in your responses to Questions 15-22 about listed activities and defining gaming.
I'm also worried about what happens if these markets are over-restricted or banned. I've seen unregulated offshore platforms out there, and they're far riskier than a regulated exchange like Kalshi. If the CFTC clamps down too hard, people like me won't stop being interested in prediction markets; we'll just get pushed to less safe venues. That can't be the goal. Regulated markets keep things transparent and accountable, and I think the US should be leading the way in financial innovation, not letting other countries take over. This ties into Questions 7-14 on public interest, where balancing innovation and consumer protection is so important.
Another point I want to make is that informed trading isn't a bad thing. When people with good information trade, it makes the market's predictions more accurate, and that benefits everyone, not just traders. Banning or restricting markets to stop a few bad actors seems like overkill when you already have tools to tackle manipulation and insider trading. I'd rather see targeted rules addressing specific risks than broad categorical bans. This relates to Questions 29-32 on inside information, and I hope you'll focus on enforcement rather than prohibition.
I understand there are concerns about manipulation or misuse, and those should be taken seriously. But the answer isn't to shut down prediction markets. It's to regulate them smartly, with clear rules that protect participants while letting innovation thrive. I'm asking you to support a framework that allows people like me to engage in these markets safely and legally.
Thank you for considering my perspective.
Sincerely,
Kenna Huot
