Comment Text:
Dear Chairman and Commissioners,
My name is Francisco Rabago, and I'm a finance professional based in California. I've been working in the financial sector for years, analyzing markets and trends, and Ive come to appreciate tools that provide real insight into the future. That's why I'm writing to comment on 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 my perspective as someone who actively trades on platforms like Kalshi.
I believe prediction markets are invaluable because they produce forecasts that are often more accurate than polls or pundits. In my line of work, Ive seen how traditional surveys can miss the mark, swayed by bias or small sample sizes. Prediction markets, on the other hand, aggregate the wisdom of many participants, and the price signals they generate cut through the noise. This isnt just helpful for traders like me; its useful for the public, policymakers, and businesses trying to anticipate major events.
I also want to stress that event contracts are not gambling. They serve genuine economic purposes. For instance, Ive used prediction markets to hedge risks tied to economic data releases, like inflation numbers that impact my investments or potential policy changes that could affect my clients. Small businesses, too, can use these tools to protect against uncertainties like regulatory shifts or election outcomes. This is about managing real-world exposure, not rolling dice.
Another reason I support regulated markets is safety. Platforms like Kalshi, operating under CFTC oversight, provide transparency and accountability that unregulated offshore alternatives simply dont. If we over-restrict or ban these markets in the U.S., activity will just move to less secure venues where theres no protection for participants. Ive traded on regulated platforms, and I trust the safeguards in place far more than I would some shadowy offshore site.
Regarding specific questions in the ANPR, Id like to address Question 8 under Public Interest. I believe prediction markets do serve the public good by improving price discovery and offering hedging opportunities, as Ive experienced firsthand. On Question 15 under Listed Activities, I urge the CFTC not to classify event contracts as gaming. Theyre a legitimate financial tool, not a game of chance. And on Question 23 under Procedural Aspects, I think public interest determinations should focus on the economic utility of these contracts, not blanket assumptions about risk.
Im not blind to concerns like manipulation or insider trading, but the CFTC already has tools to tackle those issues. Banning or overly restricting prediction markets punishes everyone for the actions of a few bad actors. Instead, I ask that you craft proportionate regulations that address specific risks while allowing these innovative tools to thrive. Prediction markets benefit society, and with the right oversight, they can continue to do so safely.
Thank you for considering my input.
Sincerely,
Francisco Rabago
